The Modified IRR (MIRR) Method

Related BrainMass Solutions

• Valuation Methodologies - NPV, IRR, and MIRR

  Second, "a key assumption made by the internal rate of return (IRR) method is questionable. Internal rate of return method assumes the rate of return is the internal rate of return on the project.

• Decision rules of capital budgeting techniques

  ), and the modified IRR (MIRR) method.

• Non normal cash flows, MIRR; Jones Construction IRR

  Calculate the project's IRR. 2) Some managers think the expected rate of return on the project will be overstated if they use the IRR method.

• Final Project IRR v. MIRR Valuation Methods

  Hello Please find the guidance and references for Rate of Return (IRR) and Modified Internal Rate of Return (MIRR) below.

• Modified IRR

  While the internal rate of return (IRR) assumes the cash flows from a project are reinvested at the IRR, the modified IRR assumes that all cash flows are reinvested at the firm's cost of capital.

• Capital Budgeting Metrics

  Thus due to this assumption IRR doest not give a proper rate of return. This drawback of IRR is rectified if we use the Modified Internal rate of Return (MIRR).

• Modified IRR (MIRR)

  , and you must base it on the modified IRR (MIRR).

• Calculate project's modified IRR (MIRR)?

  Output: I = 12.866% = MIRR 12.9%. This post gives a detailed solution for calculating project's modified IRR (MIRR).

• Computing IRR and MIRR for Project Erie

  Also how am I to describe the modified internal rate of return (MIRR) as a method for deciding the desirability of a capital budgeting project as well as what are MIRR's strengths and weaknesses?