Given a particular set of project cash flows,which one of the following statements must be correct?
A) There can be only one NPV for the project.
B) There can be only one IRR for the project.
C) There can be more than one IRR for the project.
D) There can be up to two profitability indexes for any project.

Question

Quizplus · Accepted Answer

There can be more than one IRR for the project because there may be multiple discount rates that make the NPV of the project equal to zero. It is possible for a project to have multiple positive and negative cash flow patterns that result in multiple IRRs.

Given a Particular Set of Project Cash Flows,which One of the Following