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Homework answers / question archive / If the net cash flows for a project change signs more than once: Select one: a
If the net cash flows for a project change signs more than once: Select one: a. There is no concern because the IRR method works perfectly well with multiple changes in sign for the project cash flows b. The project should never be accepted c. All projects should be ranked according to their payback period to determine which project should be accepted d. The project may have more than one IRR; the NPV method should be used to determine whether to accept the project e. The project may have more than one IRR the highest IRR should be used to determine whether to accept the project Projects P and Q are mutually exclusive projects under consideration by a company which has a cost of capital of 12%. Project P has an IRR = 14% while Project has an IRR = 11% No other information is available. Which project should the form accept? Select one: a. Project P b. Project o, Cannot be determined from above information
rate positively .
| ans a) | Correct answer is option = | |||||||||||
| d) the project may have more than one IRR, the NPV method should be used to determine whether to accept the project | ||||||||||||
| ans b) | Correct answer is option = | |||||||||||
| b) Project Q | ||||||||||||
| Because IRR is > than P and also from required rate of return |
