The modified internal rate of return (MIRR) is a better indicator of a project's true profitability because:
A. only cash flows after payback period are discounted.
B. of the assumption of a shorter payback period than the maximum cost recovery time established by firm.
C. it assumes that the cash flows are reinvested at the required rate of return.
D. of the assumption that the cash flows are reinvested at a risk-free rate.
E. the cash flows are discounted at the internal rate of return.
Answer: C
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