How many discount rates produce a zero NPV for this project?
Wilson Flannery is concerned that this project has multiple IRRs.
Year 0 1 2 3
Cash flows ?50 100 0 ?50
a. One, a discount rate of 0 percent.
b. Two, discount rates of 0 percent and 32 percent.
c. Two, discount rates of 0 percent and 62 percent.
Answer: c. Two, discount rates of 0 percent and 62 percent.
Business
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