manasib

soddy1979 Wrote:
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> [...]
>
> Basically, if you have unconventional cash flows
> (ie. not an outflow followed by an inflow) you
> will have multiple IRR's.
>
> Once you understand this, you can automatically
> discount C & B.

no, not automatically. if there is an unconventional CF pattern, there MIGHT be several IRRs (possibly one for each change in signs) but this is not a MUST.

> The only way you could ever have no IRR would be
> if you had an outflow only. Then your return would
> be zero percent. That's B gone.

don't you think that your return would be -100%?

about the relevance of finding a possibly additional IRR:
ok, let me rephrase:

it is possible with your calc to find it, sure... but what is the benefit? to show that you can calculate NPVs with a range of different rates and see which one brings NPV closest to zero? the concept is important, but i rather think, that if a question related to several IRRs is posed, than

- either you'll have some direction on in what range to start iterating (like in the description of the question above),
- it is obvious for some reason what the IRR must be, or
- it will be a conceptual question without calcs