Which Statement About a Project's MIRR Is Correct? Assume That

question 62

Multiple Choice

Which statement about a project's MIRR 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.

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Definitions:

Sources of Cash

Various origins from which a business or individual can obtain funds, including operations, financing, and investing activities.

Use of Cash

Describes the various ways a company or an individual applies their available cash, including operations, investments, and financing activities.

Price/Earnings Ratio

A valuation metric that compares a company's current share price to its per-share earnings, often used to gauge if a stock is over or undervalued.

High P/E Ratio

Indicates that a company's stock price is high relative to its earnings per share, suggesting that investors may expect higher earnings growth in the future.