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Which of the following statements about modified internal rate of return (MIRR) and internal rate of return (IRR) is correct?
Suggested Answer: A
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30 comments · newest first
CE
Cecily
12 months ago
C is false, MIRR and IRR can rank projects differently.
FL
Fletcher
12 months ago
Wait, D can't be right all the time, can it?
LA
Laurel
1 year ago
B seems off, IRR can also favor long payback projects.
TH
Theresia
1 year ago
Totally agree with A, IRR can be misleading!
ER
Erick
1 year ago
A is true, MIRR does use a better reinvestment rate.
KA
Kaitlyn
1 year ago
I vaguely recall that MIRR and IRR can sometimes rank projects differently, especially if cash flows are unconventional. So, I’m leaning towards option A as well.
AM
Amie
1 year ago
I think option A is correct because MIRR does use a more realistic reinvestment rate, but I’m not 100% certain about the other options.
KI
Kiley
1 year ago
I’m not entirely sure, but I think MIRR might favor projects with longer payback periods? I feel like I saw a question like that in our practice exams.
CH
Chantay
1 year ago
I remember that MIRR is supposed to give a better picture of the project's profitability because it assumes reinvestment at the cost of capital, unlike IRR.
EN
Ena
1 year ago
This seems like a pretty straightforward question about testing controls over sales transactions. I think the key is to focus on procedures that would help verify the completeness of recorded sales.
CE
Cecilia
1 year ago
Hmm, I'm a bit unsure about this one. I know we need to configure something related to Webex Teams, but I'm not sure about the other element. Maybe the gRPC credentials?
TI
Tish
1 year ago
Wait, I'm a bit confused. Is this asking about authentication issues, privacy vulnerabilities, privacy threat vectors, or reportable privacy violations? I'll have to re-read the question and options carefully to make sure I understand what they're looking for.
CL
Clorinda
1 year ago
I found similar practice questions mentioning User Agent Accessibility Guidelines, but they seemed more about how browsers handle accessibility rather than web content itself.
HI
Hildegarde
1 year ago
D) A project's MIRR will always be higher than its IRR. Well, that's convenient! I guess the finance gods decided to make MIRR the 'above-average' sibling of the IRR family.
BI
Billi
1 year ago
D) A project's MIRR will always be higher than its IRR.
BR
Brendan
1 year ago
C) MIRR and IRR will always rank competing projects in the same order.
TH
Theodora
1 year ago
A) MIRR uses a more realistic reinvestment assumption than IRR.
AN
Annamaria
2 years ago
B) MIRR favours projects with long payback periods whereas IRR does not. Interesting. I wonder if that means MIRR is better for evaluating long-term investments. Or maybe it just likes to torture project managers with endless calculations.
RO
Rossana
2 years ago
Hmm, that's interesting. Can you explain why you think that?
MA
Madonna
2 years ago
C) MIRR and IRR will always rank competing projects in the same order. Hmm, I'm not so sure about that. Isn't the whole point of MIRR to provide a different perspective on project ranking compared to IRR?
BE
Ben
1 year ago
C) MIRR and IRR will always rank competing projects in the same order.
BE
Ben
1 year ago
A) MIRR uses a more realistic reinvestment assumption than IRR.
YO
Yolando
2 years ago
I disagree, I believe the correct statement is C) MIRR and IRR will always rank competing projects in the same order.
ED
Edna
2 years ago
D) A project's MIRR will always be higher than its IRR. Really? I thought MIRR was supposed to be more conservative than IRR. Guess I need to review the differences between these two metrics.
RO
Rossana
2 years ago
I think the correct statement is A) MIRR uses a more realistic reinvestment assumption than IRR.
HI
Hildegarde
2 years ago
A) MIRR uses a more realistic reinvestment assumption than IRR. This makes sense to me, as MIRR considers the actual rates at which cash flows can be reinvested, rather than just assuming a constant rate like IRR.
GI
Gilbert
1 year ago
Definitely, it's a better measure than IRR in that sense.
DE
Denny
1 year ago
So, MIRR is more accurate in evaluating projects.
HU
Huey
1 year ago
That's true, MIRR considers actual reinvestment rates.
TR
Tresa
2 years ago
I think A) MIRR uses a more realistic reinvestment assumption than IRR.