IRR ambiguity? calculator, following, multiple, between, further

mdfb79

Would someone please explain this further - I got this one wrong; my only reason for my choice between either a or b was my calculator could compute b and not a. What is the diff between a and b?





Q #88553 Qbank

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: A 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%