If the Sign of the Cash Flows for a Project

question 20

Multiple Choice

If the sign of the cash flows for a project changes two times then the project has:

• A) one IRR
• B) two IRRs
• C) three IRRs
• D) None of the above

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Definitions:

Null Hypothesis

The hypothesis tentatively assumed true in the hypothesis testing procedure.

Parameter

A numerical characteristic of a population, as opposed to a statistic, which is a characteristic of a sample.

Critical Value

A threshold value in hypothesis testing, beyond which there is evidence against the null hypothesis.

T Value

A value derived from a T-distribution used in hypothesis testing and in generating confidence intervals.