Which of the following statements is CORRECT? (Points : 10) If a project has “no

Question

Which of the following statements is CORRECT? (Points : 10)
If a project has “normal” cash flows, then its IRR must be positive.
If a project has “normal” cash flows, then its MIRR must be positive.
If a project has “normal” cash flows, then it will have exactly two real IRRs.
The definition of “normal” cash flows is that the cash flow stream has one or more negative cash flows followed by a stream of positive cash flows and then one negative cash flow at the end of the project’s life.
If a project has “normal” cash flows, then it can have only one real IRR,

Explanation / Answer

If a project has “normal” cash flows, then it can have only one real IRR, whereas a project with “nonnormal” cash flows might have more than one real IRR. Hence, the Option D is correct.

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