The modified internal rate of return (MIRR) is the discount rate that forces the ______.

Question

Quizplus · Accepted Answer

The modified internal rate of return (MIRR) is used to overcome some of the limitations of the traditional internal rate of return (IRR). The MIRR assumes that all cash flows are reinvested at the discount rate, while the traditional IRR assumes all cash flows are reinvested at the project's rate of return. The MIRR calculates the discount rate that makes the present value of the project's terminal value equal to the present value of its costs (cash outflows). Therefore, the correct choice is B.

The Modified Internal Rate of Return (MIRR) Is the Discount