Internal Rate of Return and NPV
Suppose that for a sequence of cash flows, the first cash flow in the sequence is negative and that the cash flows have a unique Internal Rate of Return of 15% per year. Is the following statement true or false?
What happens to the NPV of cashflows if you discount the cash flows using a rate of 15% per period? Is it positive, 0, or negative?
Now, I have read that the IRR equates the inflows and outflows - i.e., the NPV becomes 0. I’m just confused with the first part of the question wherein they have mentioned about the 1st CF to be negative.
Can someone explain please?
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