How many possible IRRs could you find for the following set of cash flows? $$\begin{array} { | r | l | l | l | l | l | }
\hline \text { Time } & 0 & 1 & 2 & 3 & 4 \
\hline \text { Cash Flow } & - \$ 10,000 & \$ 5,350 & \$ 4,180 & \$ 1,520 & \$ 2,000 \
\hline
\end{array}$$
A)1
B)2
C)3
D)Unable to determine unless we have the cost of capital.

Question

How many possible IRRs could you find for the following set of cash flows? $$\begin{array} { | r | l | l | l | l | l | } 
\hline \text { Time } & 0 & 1 & 2 & 3 & 4 \
\hline \text { Cash Flow } & - \$ 10,000 & \$ 5,350 & \$ 4,180 & \$ 1,520 & \$ 2,000 \
\hline
\end{array}$$
A)1
B)2
C)3
D)Unable to determine unless we have the cost of capital.

Quizplus · Accepted Answer

The cash flows change sign only once, indicating there is only one possible IRR.

How Many Possible IRRs Could You Find for the Following