How Many Possible IRRs Could You Find for the Following

question 41

Multiple Choice

How many possible IRRs could you find for the following set of cash flows? $$\begin{array} { l c c c c c } \text { Time } & 0 & 1 & 2 & 3 & 4 \\\text { Cash Flow } & - \$ 15,000 & \$ 6,000 & \$ 10,000 & \$ 12,000 & - \$ 1,000 \\\hline\end{array}$$

• A)1
• B)2
• C)3
• D)Unable to determine unless we have the cost of capital.

---

Definitions:

Finance Lease

A lease agreement that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred.

AASB 16

An accounting standard issued by the Australian Accounting Standards Board specifying the principles for recognition, measurement, presentation, and disclosure of leases.

IFRS 16

The International Financial Reporting Standard issued by the IASB which specifies how an IFRS reporter will recognize, measure, present, and disclose leases.

AASB 16

An accounting standard issued by the Australian Accounting Standards Board that specifies the principles for the recognition, measurement, presentation, and disclosure of leases.