medium · Principles of Finance

Under what condition might a project yield multiple internal rates of return (IRRs)?

1. When the project's initial investment is significantly larger than its subsequent inflows.
2. When the firm uses a variable cost of capital to evaluate the project.
3. When the project's cash flows change sign more than once over its life.
4. When the project has a positive NPV at all discount rates below the hurdle rate.

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