Multiple solution rates refer to various rates of return that can be computed in certain appraisal scenarios using the Internal Rate of Return (IRR) method, particularly when cash flows vary between positive and negative values.
In capital budgeting, the payback period estimates the time required to recover the initial investment from cash inflows generated by the project. The major limitation of this method is that it does not consider cash flows after the payback period and, thus, it's not a reliable measure of the overall profitability of an investment.
