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Under Certain Conditions, a Particular Project May Have More Than

question 39

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Under certain conditions, a particular project may have more than one IRR. One condition under which this situation can occur is if, in addition to the initial investment at time = 0, a negative cash flow occurs at the end of the project's life.

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Definitions:

Encoding Specificity Effect

The principle that retrieval of information is improved when conditions at recall match those at encoding.

Primacy Effect

The tendency to remember information presented at the beginning of a list or sequence better than information that comes later.

Recency Effect

A memory bias where the most recently presented information is remembered better than older information.

TOT Effect

The Tip-of-the-Tongue phenomenon where a person cannot fully recall a word or name, but has partial recall and a sense of imminent retrieval.

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