The cash flows occurring with more than one change in sign of cash flow are classified as __________?
Correct answer: A. non-normal cash flow
- A. non-normal cash flow
- B. normal cash flow
- C. normal costs
- D. non-normal costs
Explanation
A non-normal cash flow changes sign more than once, such as moving from negative to positive and later back to negative. Multiple sign changes can create more than one possible IRR.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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