The modified IRR (MIRR) is normally
A)Less than the regular IRR if IRR r.
B)Greater than the regular IRR if IRR r.
C)Equal to the regular IRR if IRR = r.
D)Answers a and c are both correct.
E)Answers b and c are both correct.

Question

The modified IRR (MIRR) is normally
A)Less than the regular IRR if IRR > r.
B)Greater than the regular IRR if IRR > r.
C)Equal to the regular IRR if IRR = r.
D)Answers a and c are both correct.
E)Answers b and c are both correct.

Quizplus · Accepted Answer

The MIRR is less than the regular IRR when IRR > r because it assumes reinvestment at the project's cost of capital rather than the IRR. It is equal to the regular IRR when IRR = r because the reinvestment rate and the IRR are the same.

The Modified IRR (MIRR) Is Normally