Which of the following can cause a project to have multiple IRRs?
A) The project has a large initial outlay.
B) A ten-year project has a negative cash flow in the last year of the project's life.
C) A project has negative cash flows in the first three years, but positive cash flows thereafter.
D) Whenever project cash flows are conventional.
E) With mutually exclusive investments.

Question

Quizplus · Accepted Answer

A project can have multiple IRRs when there are non-conventional cash flows, such as a negative cash flow occurring after positive cash flows, which can happen in option B.

Which of the Following Can Cause a Project to Have