CFA® Level 1 Exam: NPV and MIRR Calculation Similarity

The Characteristics Required for Consistent NPV and MIRR Results

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Question

Which of the following characteristics is not necessary for the NPV and MIRR calculations to consistently produce similar results?

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Explanations

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A. B. C. D. E.

E

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. It is not necessary for projects to be independent in order for the NPV and MIRR methods to produce similar results.