Condition 2: Cash flows change signs more than once
{"Image DocumentName": "Condition 2: Cash flows change signs more than once", "Image ImageDescription": "FI Corporate Finance leng Ling. Condition 2: Cash flows change signs more than once. Consider the following project cash flows: t = 0, - 400, t = 1,  2,500, t = 2, - 3,000. Suppose that the company\u2019s cost of capital is 70 percent. NPV =   The project is, acceptable. There are two IRR\u2019s for this project: 61.98%, 363%. Look at the NPV profile (next slide). When there are multiple IRRs, the IRR method loses meaning and is NOT appropriate. However, the NPV method still gives the correct accept/reject decision. Using the BA II Plus, students will get the first IRR = 61.98%, but this is misleading.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}