Which of the following statements regarding cash flow patterns (for time periods 0, 1, 2,

3, and 4) is correct?

A. The sequence of -Rs.100, Rs.50, Rs.40, Rs.60, and Rs.50 is a non-conventional cash

flow pattern

B. The sequence of -Rs.100, Rs.600, -Rs.1,100, Rs.600, and Rs.20 potentially has a

maximum of two internal rates of return.

C. The sequence of +Rs.100, -Rs.1,100, and Rs.1,600 is a conventional cash flow

pattern.

D. The sequence of -Rs.50, Rs.50, Rs.70, Rs.60, and -Rs.150 potentially has at most

two internal rates of return.

1 Answer

Answer :

B. The sequence of -Rs.100, Rs.600, -Rs.1,100, Rs.600, and Rs.20 potentially has a

maximum of two internal rates of return.

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