The internal rate of return (IRR) rule will agree with the Net Present Value rule even when positive cash flows precede negative cash flows.

Question

Quizplus · Accepted Answer

The IRR rule may not agree with the NPV rule when positive cash flows precede negative cash flows due to the potential for multiple IRRs or non-standard cash flow patterns, which can lead to misleading IRR calculations.

The Internal Rate of Return (IRR) Rule Will Agree with the Net