Which of the following statements is most CORRECT? A. Some projects with normal cash flows have multiple IRRs. B. The IRR method is flawed because it assumes reinvestment of the cash flows at the cost of capital. C. If two, mutually exclusive normal projects have the same size and life, MIRR and NPV may not agree as to which project will add the most value to the firm. D. The MIRR assumes that cash flows are reinvested at the project's k E. Projects with nonnormal cash flows can have multiple MIRRS

Which of the following statements is CORRECT? Assume that all projects being considered have normal cash flows and are equally risky. O If a project's IRR is equal to its WACC, then under all reasonable conditions, the project's IRR must be negative. O If a project's IRR is equal to its WACC, then under all reasonable conditions the project's NPV must be zero. O There is no necessary relationship between a project's IRR, its WACC, and its NPV. O When evaluating mutually exclusive projects, those projects with relatively long lives will tend to have relatively high NPVS when the cost of capital is relatively high. O If a project's IRR is equal to its WACC, then, under all reasonable conditions, the project's NPV must be negative.

I'm not sure if I am doing this correctly.

Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project’s IRR. Consider the following situation: Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment of $2,225,000. The project’s expected cash flows are: Year Cash Flow Year 1 $350,000 Year 2 –125,000 Year 3 450,000 Year 4 450,000   Green Caterpillar Garden Supplies Inc.’s WACC is 7%, and the project has the same risk as the firm’s average project. Calculate this project’s modified internal rate of return (MIRR): -12.63%   26.46%   30.64%   29.24%     If Green Caterpillar Garden Supplies Inc.’s managers select projects based on the MIRR criterion,…