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Which of the following statement of IRR analysis is TRUE? A. A project can only have...

Which of the following statement of IRR analysis is TRUE?
A. A project can only have one IRR.
B. If a project has two IRR, then we will accept the project when the required rate of
return is smaller than both IRR.
C. When evaluating mutually exclusive projects, the project with highest IRR also has
the highest NPV.
D. When calculating IRR of a project, we need both cash flows and required rate of
return of the project.
E. For an investing project with conventional cash flows, the NPV must be positive if
the required rate of return is smaller than IRR.

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Answer #1

If the required rate of return is less than the IRR, project creates value to the firm. This project should be accepted if it is conventional.

Hence, correct option is E

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