12. Modified Internal Rate of Return One of the less flattering interpretations of the acronym MIRR is "meaningless internal rate of return Why do you think this term is applied to MIRR

14.internal Rate of Return It is sometimes stated thatThe internal rate of return approach assumes reinvestment of the intermediate cash flows at the internal rate of return.Is this claim correct? To answer, suppose you calculate the IRR of a project in the usual wayNext suppose you do the following

A)Calculate the future value (as of the end of the project) of all the cash flows other than the initial outlay assuming they are reinvested at the IRRproducing a single future value figure for the project

B)Calculate the IRR of the project using the single future value calculated in the previous step and the initial outlay. It is easy to verify that you will get the same IRR as in your original calculation only if you use the as the reinvestment rate in the previous step.

10. Internal Rate of Return Projects A and B have the following cash flows: 10. Internal Rate of Return Projects A and B have the following cash flows