Question: A key difference between the IRR and the MIRR is a . cash flows are assumed to be reinvested at the risk - free rate.

A key difference between the IRR and the MIRR is
a. cash flows are assumed to be reinvested at the risk-free rate.
b. unlike IRR, MIRR is superior to NPV as a project screener.
c. IRR is a better indicator of the rate of return on the project and its reinvested cash flows.
d. cash flows are assumed to be reinvested at the WACC.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

A key difference between the IRR and the MIRR is a. cash flows are assumed to be reinvested at the WACC. b. cash flows are assumed to be reinvested at the risk free rate. C c. IRR is a better...

Q:

Thank you ! I Cash Flows -69 0 11 Risk Free Rate Beta of company's stock Risk Premium on average stock 4.0% 2.3 5.5% 14 10 13 16 15 15 11 16 15 10 35 Using the IRR approach to capital budgeting,...

Q:

Please show work within Excel format shown!! The advantage of using the MIRR, relative to the IRR, is that the MIRR assumes that cash flows received are reinvested at the cost of capital, not the...

Q:

Which of the following statements is CORRECT? The higher the cost of capital, the higher the NPV . The Profitability Index is the most widely used measure to analyze a project. Unlike the regular...

Q:

Which of the following statements is CORRECT? A. One advantage of the NPV over the IRR is that NPV assumes that cash flows will be reinvested at the WACC, whereas IRR assumes that cash flows are...

Q:

please answer the word questions in the first picture. im having a litte trouble understanding! thank you i. If the payback was the only method a firm used to accept or reject projects, what payback...

Q:

Here is an article that goes into some technical details underlying the IRR (Internal Rate of Return): Maybe finance managers just enjoy living on the edge. What else would explain their weakness for...

Q:

Which of the following statements is CORRECT? The higher the cost of capital, the higher the NPV. Unlike the regular IRR, the MIRR assumes that cash flows are reinvested at the cost of capital. The...

Q:

According to the video, the calculations of the IRR is based on the assumption that cash flows can be reinvested at: the IRR. the MIRR. the NPV. the WACC. Follow these steps describing how the MIRR...

Q:

1. Basic concepts Select the correct term for each of the following descriptions Hint: These are not necessarily complete definitions, but there is only one possible description for each term....

Q:

Discuss the relationships among data, information, and knowledge.

Q:

Place letters of an accountants career position in front of each description of services that fit. You may use any number of letters on each line and use the letters as many times as they fit. (a) An...

Q:

Estimating an asset to have 1 0 years of useful life instead of 1 5 will benefit the firm's earnings if straight - line depreciation is used for the financial statements. True False Clear selection

Q:

give rationale why mann whitney test best statistical test for this case : Do significant differences exist between husbands and wives regarding holiday depression? There is an ordinal measure of...

Q:

individualism, which is reflected in non-conformity rather than competitiveness, but needing group consensus in order to make a stand;

Q:

the view that meetings are important and managers expected to be good communicators;

Q:

an element of formality in the workplace between different levels;