When Evaluating Mutually Exclusive Projects, the Modified IRR (MIRR) Always

question 10

True/False

When evaluating mutually exclusive projects, the modified IRR (MIRR) always leads to the same capital budgeting decisions as the NPV method, regardless of the relative lives or sizes of the projects being evaluated.

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Definitions:

Long Term Investments

Assets or securities that an investor holds with the intention to retain for a period of several years or longer.

Life Insurance Companies

Financial institutions that provide coverage that pays out a sum of money either on the death of the insured person or after a set period.

Investment Horizon

The length of time an investor plans to hold a particular investment.

Socially Responsible Fund

An investment fund that seeks to generate financial returns while also considering social and environmental criteria.