Is it possible to get 3 internal rates of return? can you please provide an example...

Question

Question

Is it possible to get 3 internal rates of return? can you please provide an example of a non-convential cash flow which results in one?

Answer 1

Answer #1

yes it is possible to get 3 Internal Rates of Return

Lets say Cash flows are given as

Year Cashflow

0 -1100

1 +750

2 +750

3 +750

4 +750

5 -2000

6 +750

7 +750

-1100+750/(1+IRR)+750/(1+IRR)^2+750/(1+IRR)^3+750/(1+IRR)^4-2000/(1+IRR)^5+750/(1+IRR)^6+750/(1+IRR)^7=0

=>IRR=-211.089%,-143.763%,46.0448%

Answer 2

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