Which of the Following Statements Is Most Correct? the Modified

question 13

Multiple Choice

Which of the following statements is most correct? The modified IRR (MIRR) method:

• A) Always leads to the same ranking decision as NPV for independent projects.
• B) Overcomes the problem of multiple rates of return.
• C) Compounds cash flows at the cost of capital.
• D) Overcomes the problems of cash flow timing and project size that lead to criticism of the regular IRR method.
• E) Answers b and c are correct.

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