Normal vs Non-Normal Cash Flows Read the first two paragraphs of Section 11-6. The difference between projects with normal and non-normal cash flows is important for the IRR calculation. Match each of the following descriptions with the cash flow type Produces multiple IRRs and a decision cannot be A. Normal Cash Flows made without a modification of the IRR calculation B. Non-normal cash flows Two or more changes of cash flow signs from positive to negative A Nuclear power plant that includes a significant upfront cost, a string of positive cash flows and then a cost to close the project A minerals mine that includes a few years of cost as production is initiated and then several years of positive cash flows followed by alternating years of positive and negative cash flows Cost (negative CF) followed by a series of positive cash inflows. One change of signs v Produces only one IRR that can be used for decision making A firm invests in new technology for several years resulting in negative project cash flows and then earns positive cash flows throughout the life of the project A production company has negative costs upfron while they customize their factory and then have positive cash flows after the first year while the factory is fully operational