A project with normal (or conventional) cash flows has a single IRR of 10%. If a project's hurdle rate is 8%, the project NPV:
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A. B. C. D.Explanation
"Normal cash flows" implies that there is an up front cost when the project is set up but all cash flows after that are cash inflows. For normal cash flows, the NPV is positive for discount rates lower than the IRR and negative for discount rates higher than the IRR. Since the project's hurdle rate is less than the IRR, the project's
NPV is positive. Note: if there are cash outflows after the project is put into operation, one can get multiple IRRs.