A project will have more than one IRR if,and only if,the:
A)primary IRR is positive.
B)primary IRR is negative.
C)NPV is zero.
D)cash flow pattern exhibits more than one sign change.
E)cash flow pattern exhibits exactly one sign change.

Question

Quizplus · Accepted Answer

A project can have more than one IRR only if there are multiple sign changes in the cash flow pattern. The primary IRR will be the highest or most relevant IRR, and it should always be positive for a viable project. Additionally, the NPV should also be positive for a project to be financially feasible. Therefore, choices A, B, and C are not correct. Choice E suggests only one sign change, which is insufficient to obtain multiple IRRs. Therefore, the best option is choice D - cash flow pattern exhibits more than one sign change.

A Project Will Have More Than One IRR If,and Only