21 Correct answer is D

“Discounted Cash Flow Applications,” RichardA. Defusco, Dennis W. McLeavey, Jerald E. Pinto, and David E. Runkel
2008 Modular Level I, Vol. 1, pp. 219-221
Study Session 2-6-a
calculate and interpret the net present value (NPV) and the internal rate of return (IRR) of an investment, contrast the NPV rule to the IRR rule, and identify problems associated with the IRR rule
The IRR rule should not be used to differentiate between mutually exclusive projects if the scale of the projects differs or if the timing of the projects’ cash flows differs.

22 Correct answer is D

“Discounted Cash Flow Applications,” RichardA. Defusco, Dennis W. McLeavey, Jerald E. Pinto, and David E. Runkel
2008 Modular Level I, Vol. 1, pp. 222-225
Study Session 2-6-c
calculate, interpret, and distinguish between the money-weighted and time-weighted rates of return of a portfolio and appraise the performance of portfolios based on these measures
The money-weighted rate of return is the IRR based on the cash flows related to the investment. In this case, a cash outflow of