Under certain conditions, a project may have more than one IRR.One such condition is when, in addition to the initial investment at time = 0, a negative cash flow (or cost)occurs at the end of the project's life.

Question

Quizplus · Accepted Answer

When there is a negative cash flow or cost at the end of the project's life, it is possible to have more than one IRR. This is because the negative cash flow may cause the NPV to cross the x-axis more than once, leading to multiple IRR values.

Under Certain Conditions, a Project May Have More Than One