The following set of cash flows changes sign twice and has two IRR solutions. Identify the sign

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The following set of cash flows changes sign twice and has two IRR solutions. Identify the sign changes. Demonstrate mathematically that 25% and 400% are both solutions to the IRR equation.

On the basis of this example, why would you expect multiple solutions to be an unusual problem inpractice?

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Practical financial management

ISBN: 978-0324422634

5th Edition

Authors: William r. Lasher

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Question Posted: Sep 13, 2012 03:42 AM

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The following set of cash flows changes sign twice and has two IRR solutions. Identify the sign

Question:

156 36 Co $(320) $2,000 $12,000)

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The sign changes from minus to plus between C 0 and C 1 and from ...View the full answer

Practical financial management

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