What is the 'concept of multiple internal rate of return'?
Concept of multiple internal rate of return
Prabeer (B. COM (H) CA & CS Final) (5484 Points)
11 November 2008
Mani VGS
(Teacher)
(729 Points)
Replied 11 November 2008
When projects are having non-conventional cashflows, the project will end up with that many negative cash flows, that no of IRRs. It is referred to as Multiple IRR..
To make it easy, look at details like this way,
year ,10k year 2, (5k) negative cf year 3, 25k here u find year 2 blessed with negative CF besides the initial CF being outflow. This project will end up with 2 IRR, then it is a case a project with multiple IRR. Project is blessed with non-conventional CF
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