The Problem of Multiple IRRs Can Occur When

question 55

Multiple Choice

The problem of multiple IRRs can occur when:

• A) there is only one sign change in the cash flows.
• B) the first cash flow is always positive.
• C) the cash flows decline over the life of the project.
• D) there is more than one sign change in the cash flows.
• E) None of these.

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Definitions:

Recessions

Periods of economic decline lasting at least six months, characterized by decreases in GDP, employment, and consumer spending.

Monetarists

Economists who believe that changes in the money supply have major influences on national output in the short run and the price level over longer periods.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured by GDP.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, bank deposits, and liquid assets.