All of the Following Statements Are Correct Except

question 113

Multiple Choice

All of the following statements are correct except:

• A)MIRR solves some of the problems presented by IRR in that MIRR rankings of mutually exclusive projects with comparably-sized initial investments will agree with the NPV rankings of those projects.
• B)MIRR always gives a single answer-it will not give us multiple answers as the IRR approach sometimes does.
• C)MIRR is most useful in the case of mutually exclusive investments and in cases where project cash flows change sign more than once.
• D)MIRR is always less than the regular IRR if the cost of capital is less than the regular IRR.
• E)all of the above are correct

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Definitions:

Absorbed Corporation

A company that has been merged into another entity, losing its previous separate identity.

Merger

The combination of two or more companies into a single entity, where one survives and the others cease to exist.

Bankruptcy

A legal process by which individuals or other entities who cannot repay debts to creditors seek relief from some or all of their debts.

SEC

Securities and Exchange Commission, a U.S. government agency responsible for regulating the securities industry and protecting investors.