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

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When a project has a negative cash flow (or cost) at the end of its life, it is possible for the project to have more than one IRR. This is because the negative cash flow can create multiple sign changes in the cash flows, leading to multiple possible discount rates that result in a net present value of zero.

Under Certain Conditions, a Project May Have More Than One