Which of the Following Statements Is CORRECT? Assume That the Project

question 51

Multiple Choice

Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows,with one outflow followed by a series of inflows.

• A) A project's MIRR is always greater than its regular IRR.
• B) A project's MIRR is always less than its regular IRR.
• C) If a project's IRR is greater than its WACC,then the MIRR will be less than the IRR.
• D) If a project's IRR is greater than its WACC,then the MIRR will be greater than the IRR.
• E) To find a project's MIRR,we compound cash inflows at the IRR and then discount the terminal value back to t = 0 at the WACC.

---

Definitions:

Infectious Diseases

Diseases caused by pathogenic microorganisms, such as bacteria, viruses, parasites or fungi; these diseases can be spread, directly or indirectly, from one person to another.

GAAS Auditing

Standards that guide the conduct of audits on the financial statements of companies, known as Generally Accepted Auditing Standards.

Adverse Opinion

An auditor’s opinion that states that deviations from generally accepted accounting principles are so serious that an unqualified opinion is impossible and a qualified opinion is not justified.

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction.