All of the Following Statements Are Correct Except

question 106

Multiple Choice

All of the following statements are correct except:

• A)MIRR solves all of the problems presented by IRR and will always provide the same recommendation as the NPV.
• B)MIRR never gives a single answer-it will always provide multiple answers unlike the IRR approach.
• C)MIRR is least useful in the case of mutually exclusive investments and in cases where project cash flows change sign more than once.
• D)MIRR is always greater than the regular IRR if the cost of capital is less than the regular IRR.
• E)none of the above are correct

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Definitions:

Par Value

Par value is the nominal or face value of a bond, share of stock, or a coupon as stated by the issuer.

Stated Value

A per-share amount set by the board of directors for no-par value stock, which is not determined by market forces.

Revaluation Surplus

An increase in the value of an asset held by a company, recognized in equity, that occurs when the asset's current market value exceeds its previously recorded cost.

Share Capital

The total amount of money raised by a company through the sale of shares to investors.