Which of the Following Is a Reason the Modified Internal

Multiple Choice

Which of the following is a reason the modified internal rate of return (MIRR) measure is a better indicator of a project's true profitability than the internal rate of return (IRR) measure?

A) The modified internal rate of return (MIRR) assumes that the project's cash flows are reinvested at its internal rate of return (IRR) , which is generally correct.
B) The modified internal rate of return (MIRR) assumes that the terminal value of the project is the profit it generates, which is generally correct.
C) The modified internal rate of return (MIRR) assumes that the project's cash flows are reinvested at the firm's required rate of return, which is a better assumption than the IRR assumption that the cash flows are reinvested at its IRR.
D) The modified internal rate of return (MIRR) assumes that the future value of the project's cash outflows is equal to its terminal value, which is generally correct.
E) The modified internal rate of return (MIRR) assumes that projects with multiple cash outflows should be evaluated with high required rates of return, which is generally correct.