Which of the following series of cash flows could have more than one IRR? (Negative cash flows are in parentheses.)
A) $(XX,XXX), $X,XXX , $X,XXX, $X,XXX
B) $(XX,XXX), $X,XXX , $X,XXX, $X,XXX, $(XX,XXX)
C) $X,XXX, $X,XXX , $X,XXX, $X,XXX, $(XX,XXX)
D) $XX,XXX, $X,XXX , $X,XXX, $X,XXX

Question

Which of the following series of cash flows could have more than one IRR? (Negative cash flows are in parentheses.)
A) $(XX,XXX), $X,XXX , $X,XXX, $X,XXX
B) $(XX,XXX), $X,XXX , $X,XXX, $X,XXX, $(XX,XXX)
C) $X,XXX, $X,XXX , $X,XXX, $X,XXX, $(XX,XXX)
D) $XX,XXX, $X,XXX , $X,XXX, $X,XXX

Quizplus · Accepted Answer

Series of cash flows with more than one sign change (i.e., from positive to negative or vice versa) can have multiple IRRs. Option B has two sign changes, while the other options have only one or no sign changes.

Which of the Following Series of Cash Flows Could Have