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

question 123

Multiple Choice

Which statement about a project's MIRR is correct? Assume that the project being considered has normal cash flows,with one cash outflow at t = 0 followed by a series of positive cash flows.

• 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)To find a project's MIRR, we compound cash inflows at the regular IRR and then find the discount rate that causes the PV of the terminal value to equal the initial cost.
• D)To find a project's MIRR, the textbook procedure compounds cash inflows at the WACC and then finds the discount rate that causes the PV of the terminal value to equal the initial cost.

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