Modified Internal Rate of Return (MIRR) Explained

Modified Internal Rate of Return (MIRR)

Prev Question Next Question

Question

The modified IRR (MIRR) is normally ________.

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

E

MIRR assumes that cash flows from all projects are reinvested at the cost of capital, while the regular IRR assumes that the cash flows from each project are reinvested at the project's own IRR. Therefore the IRR will be greater than the MIRR if the IRR is greater than the cost of capital.