The typical cash flow pattern for business projects involves

| September 11, 2016

Question
The typical cash flow pattern for business projects involves cash outflows first, and then inflows. However, it’s possible to imagine a project in which the pattern is reversed. For example, we might receive inflows now in return for guaranteeing to make payments later. Would the payback, NPV, and IRR methods work for such a project? What would the NPV profile look like? Could the NPV and IRR methods give conflicting results?

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