Asked by
Eriyanna Synclair
on Nov 07, 2024
Verified
The IRR method can produce multiple rates of return if the cash flows are nonconventional.
IRR Method
The Internal Rate of Return method, a capital budgeting technique that calculates the rate of return at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.
Nonconventional Flows
Atypical or irregular cash flows in an investment, complicating the assessment of an investment's value or project's profitability.
- Familiarize with the concept of the internal rate of return and its impact on the selection of investments.
Verified Answer
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Learning Objectives
- Familiarize with the concept of the internal rate of return and its impact on the selection of investments.