How Many Possible IRRs Could You Find for the Following

question 71

Multiple Choice

How many possible IRRs could you find for the following set of cash flows?
$$\begin{array} { c c c c c c } \text { Time } & 0 & 1 & 2 & 3 & 4 \\\text { Cash Flow } & - \$ 15,000 & \$ 6,000 & \$ 10,000 & \$ 12,000 & \$ 1,000\end{array}$$

• A) 1
• B) 2
• C) 3
• D) Unable to determine unless we have the cost of capital.

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Definitions:

Portfolio

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs).

Financial Characteristics

Refers to attributes that describe the financial health, performance, and structure of a company, such as revenue, profitability, debt levels, and liquidity ratios.

Firm's Beta

A measurement of a company's stock market risk compared to the market as a whole; it quantifies the volatility or systemic risk of a firm's shares.

Industry Group

A classification of companies that conduct business activities in the same sector or segment of the economy.