When an investment requires the investor to make multiple future payments,rather than a single initial payment,____.
A) it will show no change in rate of return
B) in will have a constant internal rate of return
C) it may have several different possible internal rates of return
D) none of the above

Question

Quizplus · Accepted Answer

When an investment requires multiple future payments, it may have different possible internal rates of return because the timing and amount of these payments can impact the overall return. Therefore, the internal rate of return may not be constant and different scenarios may result in different rates of return. Option A is incorrect because multiple payments will result in a change in rate of return. Option B is incorrect because the internal rate of return may not remain constant.

When an Investment Requires the Investor to Make Multiple Future