Question 2 2 pts Which of the following statements is NOT CORRECT? (select all that apply) The modified internal rate of return (MIRR) is a better measure of a project's return than the internal rate of return (IRR) because MIRR assumes that the project's cash flows can be reinvested at the project's internal rate of return. The modified internal rate of return overstates a project's true return, so that's why the internal rate of return is a better measure of a project's return. Due to the mathematics involved in the equations used to solve for both the internal rate of return and the modified internal rate of return, the solutions for the returns are identical-the answers will always be the same. The internal rate of return (IRR) is not a good measure of a project's true return. The IRR overstates a project's true return because it assumes that a project's cash flows can be reinvested at the project's internal rate of return. The Modified Internal Rate of Return, however, is a better measure of a project's return because it assumes that a project's cash flows are reinvested at the firm's weighted average cost of capital. Which of the following statements is CORRECT? (select all that apply) Opportunity costs and sunk costs are tricky when analyzing capital budgeting projects. In summary, for a correct capital budgeting analysis, opportunity costs must be included in the analysis while sunk costs should be ignored-the money is gone whether the project is undertaken or not. An opportunity cost represents the best return a company could get on an asset it already owns. It is the cost of losing out on something if you greenlight the project, so you want to include this cost in the capital budgeting analysis. Sunk costs are the costs associated with "the road not taken". They represent the alternative cost of an asset if that asset were not already owned by the firm; therefore, these costs should be included in the capital budgeting analysis. Sunk costs are cash outlays a company has made in the past, and they can't be recovered whether the new project goes forward or not. Thus, you don't include these costs in the project's capital budgeting analysis. While an opportunity cost is not an actual cash outlay, this cost must be added to the project's costs when you calculate its net present value