There exists an IRR solution for each time the direction of cash flows associated with project is interrupted.

Question

Quizplus · Accepted Answer

The IRR (Internal Rate of Return) is a financial metric used to evaluate the profitability of an investment. It considers the time-value of money and calculates the rate of return that makes the present value of future cash flows equal to the initial investment. The IRR assumes that the cash flows are received at regular intervals and are either positive or negative. However, if there are interruptions in the cash flows, the IRR can still be solved by treating each segment of the project as a separate investment with its own initial investment and cash flows. Therefore, there exists an IRR solution for each time the direction of cash flows associated with project is interrupted.

There Exists an IRR Solution for Each Time the Direction