The number of internal rates of return is limited to the:
A)number of investments being evaluated.
B)number of sign reversals in the cash flow stream.
C)direction of sign reversals in the cash flow stream.
D)none of the given options.

Question

Quizplus · Accepted Answer

The number of internal rates of return is limited to the number of sign reversals in the cash flow stream. This is because each sign reversal can result in a different IRR, so the number of possible IRRs is equal to the number of sign reversals. Therefore, option B is the correct answer.

The Number of Internal Rates of Return Is Limited to The