which of the following statements is correct? a. multiple irrs can exist, but not multiple mirrs. this is one reason some people favor the mirr over the regular irr. b. if a firm uses the discounted payback method with a required payback of 4 years, then it will accept more projects than if it used a regular payback of 4 years. c. for mutually exclusive projects with normal cash flows, the npv and mirr methods can never conflict, but their results could conflict with the discounted payback and the regular irr methods. d. the npv, irr, mirr, and discounted payback (using a payback requirement of 3 years or less) methods always lead to the same accept/reject decisions for independent projects.

Respuesta :

Multiple IRRs can exist, but not multiple MIRRs. This is one reason some people favor the MIRR over the regular IRR.

Why would a project have multiple IRRs?

  • There can be more than one IRR, but not more than one MIRR.This is one of the arguments in favor of the MIRR versus the conventional IRR.Junk bonds are a type of high-risk, high-yield debt.
  • They are frequently employed to fund leveraged acquisitions and mergers as well as to lend money to businesses with uncertain financial standing.
  • When one analyzes cash inflows and cash outflows in the internal rate of return, multiple rates of return occur. The internal rate of return is the present value of cash flows that will result in a project breaking even.If there are many sign changes in a net cash flow stream, the IRRs will vary.
  • If a project has nonstandard cash flows, it may have several IRRs.When cash withdrawals happen after cash inflows have started, this is known as an abnormal cashflow.

To learn more about multiple IRRs refer

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