For a project with multiple sign reversals in its cash flows,the net present value can be the same for two entirely different discount rates.

Question

Quizplus · Accepted Answer

This is because multiple sign reversals in cash flows can lead to multiple internal rates of return (IRR), and therefore there may be more than one discount rate at which the net present value (NPV) is zero, resulting in the same NPV for two different discount rates.

For a Project with Multiple Sign Reversals in Its Cash