IRR

Dear Tutor,

I hope you are well. I am trying hard but still failed to understand the below. Would you be able to explain it in a simple way to help me to understand?

From the information below, we can tell that at least one years’ cash flow would be positive but how do we know the graph would be U shape? (The explanation in the answer says it is a U shape graph). If one year’s cash flow is positive and another year’s cash flow is negative, the graph would be like a slope.

Thank you in advance,

A company is considering a two-year project, which has two annual internal rates of return, namely 10% and 25. The sum of the undiscounted cash flows is positive.

Question: the project will necessarily have a positive net present value, when the annual cost of capital is

A more than 25%
B more than 10%
C between 10% and 25%
D less than 25%