NPV and MIRR Methods: Consistent Ranking Characteristics

NPV and MIRR Methods

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Question

In order for the NPV and MIRR methods to consistently produce similar rankings, the projects being examined must possess which of the following characteristics? Choose the best answer.

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Explanations

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A. B. C. D. E. F.

D

When examining mutually-exclusive projects with normal cash flows, the MIRR and NPV methods will ALWAYS produce similar results as long as the projects being examined are equal in size and have the same life.