A project will have only one internal rate of return if:
A) all cash flows after the initial expense are positive.
B) average accounting return is positive.
C) net present value is negative.
D) net present value is positive.
E) net present value is zero.

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is unique for a project if all future cash flows following the initial investment are positive. This is because the project's cash flow pattern does not change sign more than once, avoiding the possibility of multiple IRRs.

A Project Will Have Only One Internal Rate of Return