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Question
Which of the following statements 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 less than its regular IRR.
b. If a project's IRR is greater than its cost of capital, then the MIRR will be less than the IRR.
c. If a project's IRR is greater than its cost of capital, then the MIRR will be greater than the IRR.
d. To find a project's MIRR, we compound cash inflows at the IRR and then discount the terminal value back to t = 0 at the cost of capital.
e. A project's MIRR is always greater than its regular IRR.
Answer
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In a portfolio of three different stocks, which of the following could NOT be true?
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Which of the following is not correct for a firm with seasonal sales and customers who all pay promptly at the end of 30 days?
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b. The level of accounts receivable will be constant from month to month.
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d. The level of accounts receivable at the end of each quarter will be the same.
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