is this question right ???
Which of the following cash flow streams is most likely to have multiple IRRs?
Purchase Price Cash Flow 1 Cash Flow 2
A) $1.0 million $1.0 million gain $0.1 million expense
B) $1.8 million $10 million gain $9 million expense
C) $1.7 million $8.0 million gain $5 million gain
Your answer: C was incorrect. The correct answer was B) $1.8 million $10 million gain $9 million expense
When there is a reversal in the sign of the cash flows, it is likely that there will be multiple IRR solutions. In fact, for the cash flow stream {-1.8; 10; -9} the IRRs are 13 and 343%. |
发表于 2013-4-2 12:28
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