Calculating IRR and MIRR Marielle Machinery Works is considering a project that has an initial investment of £10,000 and expected cash flows of £0 in year 1, £7,500 in year 2 and £8,500 in year 3. The company uses the IRR rule to accept or reject projects, and has asked for your assessment on what to do if the required rate of return is 12 per cent. A colleague suggests that, since the firm can only reinvest the cash flows at the the firm’s discount rate of 12 per cent, you should use the MIRR method instead. What is the project’s MIRR and how does it compare to the IRR? Which method should you use?