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CIMA Exam CIMAPRO19-P02-1 Topic 4 Question 65 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 65
Topic #: 4
[All CIMAPRO19-P02-1 Questions]

Which of the following statements about modified internal rate of return (MIRR) and internal rate of return (IRR) is correct?

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Suggested Answer: A

by Ozell at Feb 08, 2023, 07:04 PM

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Hildegarde
27 days ago
D) A project's MIRR will always be higher than its IRR. Well, that's convenient! I guess the finance gods decided to make MIRR the 'above-average' sibling of the IRR family.
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Brendan
11 days ago
C) MIRR and IRR will always rank competing projects in the same order.
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Theodora
12 days ago
A) MIRR uses a more realistic reinvestment assumption than IRR.
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Annamaria
29 days ago
B) MIRR favours projects with long payback periods whereas IRR does not. Interesting. I wonder if that means MIRR is better for evaluating long-term investments. Or maybe it just likes to torture project managers with endless calculations.
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Rossana
1 months ago
Hmm, that's interesting. Can you explain why you think that?
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Madonna
1 months ago
C) MIRR and IRR will always rank competing projects in the same order. Hmm, I'm not so sure about that. Isn't the whole point of MIRR to provide a different perspective on project ranking compared to IRR?
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Ben
14 days ago
C) MIRR and IRR will always rank competing projects in the same order.
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Ben
16 days ago
A) MIRR uses a more realistic reinvestment assumption than IRR.
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Yolando
1 months ago
I disagree, I believe the correct statement is C) MIRR and IRR will always rank competing projects in the same order.
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Edna
1 months ago
D) A project's MIRR will always be higher than its IRR. Really? I thought MIRR was supposed to be more conservative than IRR. Guess I need to review the differences between these two metrics.
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Rossana
1 months ago
I think the correct statement is A) MIRR uses a more realistic reinvestment assumption than IRR.
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Hildegarde
2 months ago
A) MIRR uses a more realistic reinvestment assumption than IRR. This makes sense to me, as MIRR considers the actual rates at which cash flows can be reinvested, rather than just assuming a constant rate like IRR.
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Gilbert
19 days ago
Definitely, it's a better measure than IRR in that sense.
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Denny
24 days ago
So, MIRR is more accurate in evaluating projects.
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Huey
28 days ago
That's true, MIRR considers actual reinvestment rates.
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Tresa
29 days ago
I think A) MIRR uses a more realistic reinvestment assumption than IRR.
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