How Many IRRs Are Possible for the Following Set of Cash

question 28

Multiple Choice

How many IRRs are possible for the following set of cash flows? CF₀ = -1,000,CF₁ = + 500,CF₂ = -300,CF₃ = + 1,000,CF₄ = + 200.

• A) 1
• B) 2
• C) 3
• D) 4

---

Definitions:

Certificate Of Investment

A financial document representing a deposit with a specified interest rate and maturity date, often issued by banks.

Bond

A contract between a borrower and a lender, in which the borrower agrees to pay the loan at some time in the future. Some bonds also make regular, constant payments once or twice a year.

Annual Interest Rate

The percentage increase in money owed per year, including the effect of compounding.

Annual Interest Rate

The percentage of a sum of money charged for its use over a year.