1. The difference between the NPV and PV stems from

A. a difference in discount rate.

B. the fact that the NPV includes the Terminal Value.

C. the fact that the IRR is the discount rate that sets NPV = 0.

D. the fact that the NPV includes the Initial Investment.

2. Which of the following statements is INCORRECT?

a. MIRR is the discount rate that causes the PV of a project’s terminal value (TV) to equal the PV of costs. TV is found by compounding inflows at WACC.

b. MIRR assumes cash flows are reinvested at the WACC.

c. MIRR avoids the multiple IRR problem.

d. The phenomenon called "multiple internal rates of return" arises when two or more mutually exclusive projects that have different lives are being compared.

e. Managers like rate of return comparisons, and MIRR is better for this than IRR.