Which Statement About Multiple IRRs Is True

question 92

Multiple Choice

Which statement about multiple IRRs is true?

• A)For a project to have more than one IRR, both IRRs must be greater than the WACC.
• B)If two projects are mutually exclusive, then they are likely to have multiple IRRs.
• C)If a project is independent, then it cannot have multiple IRRs.
• D)Multiple IRRs can occur only if the signs of the cash flows change more than once.

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Definitions:

Revenue

The cumulative revenue produced from the sale of products or services that are central to a company's main business activities.

Revenue Variance

The difference between the actual revenue earned and the budgeted or expected revenue.

Spending Variances

Differences between the budgeted amount of expense and the actual amount spent.

Customers Served

The number of customers who have purchased or utilized a service from a business within a given time period.