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Sir, i have got a cash flow pattern with —++++++++++ start from Year 0 where it has net cash outflow in Year 0,1 and 2 and net cash inflow from year 3 onwards. Does it considered as conventional cash flow or unconventional? And can payback period and IRR be applied to the cash flow?
It is conventional and the payback period and IRR are calculated in the normal way.
Payback period is always calculated in the normal way, whatever the cash flows. IRR is only a problem if the signs of the cash flows change more than once (for example, if they start negative, then become positive, and then become negative again). If that is the case then you cannot be asked to calculate the IRR, but it is not the case here – the sign of the cash flows only changes once.
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