alleryStart learning →When may a project have more than one IRR?
AWhen the cost of capital is zero
BWhen all cash flows are positive
CWhen cash flow signs change more than once
DWhen the project lasts only one year
Answer & Solution
Correct answer: C. When cash flow signs change more than once
Multiple sign changes in the cash flows can give several solutions to the equation NPV = 0.
Keep practising Capital Budgeting
Browse all Capital Budgeting questions for CA Inter, or explore more Financial Management topics.
Related questions
Under which cash flow statement section is capex commonly reported?Which spending is capital expenditure as it extends asset life?Which of these spending items is a capital expenditure?Where do capitalised expenditures show up in the financial statements?Which expense is the counterpart of capital expenditure?What is capital expenditure (capex)?Payback also ignores which part of a project's cash flows?Which key weakness does the simple payback period have?