Purchase Solution

New Learning: IRR vs. MIRR Valuation Methods

Not what you're looking for?

Ask Custom Question

The paper must

(a) identify the main issues in the chosen area,
(b) new learning that has occurred,
(c) class activities or incidents that facilitated learning and understanding, and
(d) specific current and/or future applications and relevance to the workplace.

The emphasis of the paper should be on application of new learning.

The Paper:

If possible, provide a context of a first-person experience where you saw this academic concept in operation. Do not simulate third-party statements of experience.

Readdress the concept and the experience with critical thought. That is, what is your response to the content, either positive or negative, and then defend your position. If multiple options/alternatives/positions are present and are being rejected you must also defend the reasons for rejecting an option.

Must conclude with a restatement of the thesis and a conclusion paragraph.

Must include, on the final page, a Reference List that is completed according to APA style as outlined in the approved APA style guide.

Purchase this Solution
Solution Summary

This solution provides a sample finance paper, which discusses the internal rate of return (IRR) and compares it to the modified internal rate of return (MIRR).

Solution Preview

Please refer to the attached file for the response.

IRR AND MIRR VALUATION METHODS: A COMPARISON

INTRODUCTION
Companies are commonly faced with a situation where, in order to survive or stay in the industry and remain competitive, must come up with well calculated financing decisions. These decisions are critical and do not only directly involve one functional area of business but involve all. To buy or not to buy machinery or equipment now or few years later would mean a lot to production, human resources, and marketing. To pursue or not to pursue an investment endeavor which is putting up a new marketing territory will mean a lot to the company's survival and competitiveness. To lease or just to put up a building for the company's manufacturing plant will mean a lot to the company's ability to cope with existing financial obligations, its ability to take advantage of a business opportunity, ability to provide attractive compensation package to its employees, and ability to produce within the expectations of the end users.

The above cited instances are only a few among the situations faced by a firm that involve capital budgeting decisions or decisions that require comparing the expected cash inflows with the cash outflows, with due consideration of cost of capital, expectation of shareholders, economic life of the intended project, the image of the company in the community, and the overall performance of the business.
These indicate that making correct decisions are crucial to the overall value of the firm. However, it is important to note that correct decisions are only made possible through correct and adequate information that formed the basis of the decision. This correct and adequate information are products of appropriate capital budgeting or valuation tools. Among them are the IRR (Internal Rate of Return) and the MIRR (Modified Internal Rate of Return).

PROBLEM STATEMENT

This paper would answer the following questions:
1. How would the two methods (IRR and MIRR) be described as capital budgeting valuation tools?
2. Which tool would provide more adequate and ...

Solution provided by:
Elisa Valdez, PhD
Education
  • Bachelor of Science in Business Administration, University of the Philippines
  • Master in Business Administration, Saint Mary's University
  • Doctor of Philosophy in Education, University of the Philippines
  • Doctor in Business Adminstration (IP), Polytechnic University of the Philippines
Recent Feedback
  • "Excellent information thanks for the input"
  • "Thank you"
  • "Very thorough and informative. Thank you."
  • "Good response. Very detailed"
  • "This solution is excellent. Thank you"
Purchase this Solution
Free BrainMass Quizzes
Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

View More Free Quizzes
Related BrainMass Solutions

  • Final Project IRR v. MIRR Valuation Methods

    292095 Final Project IRR v. MIRR Valuation Methods For IRR v. MIRR valuation methods: - Identify the issues. - Specific current and / or future applications and relevance to the workplace/ - Emphasis on application of new learning.

  • NPV, IRR, MIRR, Pay Back

    203843 Valuation Methodologies: NPV, IRR, MIRR, Pay Back for new plant construction project You need to get a better understanding of a new plant construction project.

  • Superior Living, Inc Project Financials: Financial Statements and Plans

    IRR v. MIRR valuation methods. Retrieved from http://www.brighthub.com/office/project-management/articles/96355.aspx 4. Kierulff, Herbert. (2008). MIRR: A better measure.

  • Key Valuation Methodologies: NPV, IRR & MIRR

    Therefore, MIRR more accurately reflects the profitability of a project. This solution discusses the three key valuation methodologies that companies use, including NPV, IRR and MIRR.

  • Valuation Methodologies - NPV, IRR, and MIRR

    492547 Valuation Methodologies - NPV, IRR, and MIRR Please help with the following problem.

  • Discussion of three valuation methodologies

    Meeting with the financial analyst of Superior Living, the author discusses the three valuation methodologies, NPV, IRR, & MIRR.

  • Project Classification, NPV, IRR, and MIRR

    It discusses concepts such as IRR, NPV, MIRR, etc. This could be used as a good learning exercise to learn the concepts. This solution is 554 words.

  • Valuation of stock, NPV, IRR, MIRR, Payback

    133109 Valuation of a constant growth stock, NPV, IRR, MIRR, payback, discounted payback A) Valuation of a constant growth stock - A stock is expected to pay a dividend of $0.50 at the end of the year (that is D1 = 0.50), and it should continue to grow

  • Financial Management

    Meeting with the financial analyst, discuss three key valuation methodologies that companies use-- NPV, IRR, and MIRR.

View More Related Solutions