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1. Project A, which costs of $1,000 to purchase, will generate net cash inflows equal to...

1. Project A, which costs of $1,000 to purchase, will generate net cash inflows equal to $500 at the end of each of the next three years. The project's required rate of return is 10 percent. What are the project's internal rate of return (IRR) and modified internal rate of return (MIRR)?

23.4%; 38.2%

14.5%; 12.6%

16.7%; 18.3%

23.4%; 16.7%

23.4%; 18.3%

2. The internal rate of return (IRR) of a project that generates its largest cash flows in the early years of its life is more sensitive to changes in the firm's required rate of return than is the IRR of a project whose largest cash flows come later in life.

TRUE OR FALSE????

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