Question

1. When there is more than one sign change in the net cash flow, there may...

1. When there is more than one sign change in the net cash flow, there may be more than one real-number root to the ROR equation, resulting in multiple i* values.

True or False

2. The IRR is the interest rate that makes the Present Worth "PW" of all the cash flows (inflows and outflows) equal to zero.

True or False

3. Conventional cash flows are also known as non-simple cash flows.

True or False

4. If the algebraic signs on the cash flows change more than once, the cash flow series is said to be non-conventional.

True or False

5.The ROR is the rate paid on the original or initial amount of money borrowed so that the final payment brings the balance to exactly zero with interest considered.

True or false

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Answer #1

Ans.

1. It is true that when there is more than one sign change in the net cash flow, there may be more than one real-number root to the ROR equation, resulting in multiple i* values.

2. It is true that the IRR is the interest rate that makes the Present Worth "PW" of all the cash flows (inflows and outflows) equal to zero.

3. It is false that Conventional cash flows are also known as non-simple cash flows. It is called simple cash flow.

4. It is true that if the algebraic signs on the cash flows change more than once, the cash flow series is said to be non-conventional.

5.The ROR is the rate paid on the original or initial amount of money borrowed so that the final payment brings the balance to exactly zero with interest considered.

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