How Many Possible IRRs Could You Find for the Following

question 43

Multiple Choice

How many possible IRRs could you find for the following set of cash flows?
$$\begin{array} { c c c c c c c } \text { Timne } & 0 & 1 & 2 & 3 & 4 \\\text { Cash Flow } & - \$ 201,000 & - \$ 37,350 & \$ 460,180 & \$ 217,020 & - \$ 5,000\end{array}$$

• A) 1
• B) 2
• C) 3
• D) 4

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Definitions:

Perfectly Elastic

Perfectly elastic describes a situation where the quantity demanded or supplied changes infinitely in response to any change in price, represented by a horizontal demand or supply curve.

Industry Supply

The total output of a specific good or service produced by all firms in an industry at various price levels.

Industry Demand

The total demand for all the goods or services produced by a particular market sector.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied responds infinitely or by unlimited quantity to any change in price, represented graphically as a horizontal line.