A Project Will Have More Than One IRR If

question 53

Multiple Choice

A project will have more than one IRR if:

• A)the IRR is positive.
• B)the IRR is negative.
• C)the NPV is zero.
• D)the cash flow pattern exhibits more than one sign change.
• E)the cash flow pattern exhibits exactly one sign change.

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Definitions:

Dollar-Value LIFO

Dollar-Value LIFO method is an inventory costing method that uses the LIFO principle coupled with grouping inventory into pools based on dollar value instead of physical units.

Base Year Cost

The initial cost of an asset or investment, used as a reference point to measure the cost growth or performance over time.

Price Index

A statistical measure that shows changes in the price level of a basket of consumer goods and services over time, used to gauge inflation or deflation.

Dollar-Value LIFO

An inventory valuation method that uses the last-in, first-out (LIFO) principle, but accounts for changes in inventory value due to inflation by measuring inventory in dollar amounts rather than units.