Which of the Following Can Cause a Project to Have

question 61

Multiple Choice

Which of the following can cause a project to have multiple IRRs?

• A) The project has a large initial outlay.
• B) A ten-year project has a negative cash flow in the last year of the project's life.
• C) A project has negative cash flows in the first three years, but positive cash flows thereafter.
• D) Whenever project cash flows are conventional.
• E) With mutually exclusive investments.

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Definitions:

Legal Ability

Refers to the capacity of a party to enter into legally binding contracts and to be held accountable for the commitments made.

Unilateral Contract

A contract where one party makes a promise in exchange for an act by another party, completion of which constitutes acceptance of the contract.

Right to Sue

The legal right of an individual or entity to bring a lawsuit against another party in a court of law.