Which of the following statements is CORRECT?

A. If two projects are mutually exclusive, then they are likely to have multiple IRRs.
B. If a project is independent, then it cannot have multiple IRRs.
C. Multiple IRRs can occur only if the signs of the cash flows change more than once.
D. If a project has two IRRs, then the smaller one is the one that is most relevant, and it should be accepted and relied upon.
E. For a project to have more than one IRR, then both IRRs must be greater than the cost of capital.


Answer: C

Business

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