Modified Internal Rate of Return method
Modified Internal Rate of Return method (alternatively known as MIRR method) is the method that assumes that cash flows from all projects are reinvested at the cost of capital, not at the project's own IRR. This makes the modified internal rate of return a better indicator of a project's true profitability.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Modified Internal Rate of Return method (MIRR method). Assumes that cash flows from all projects are reinvested at the cost of capital, not at the project's own IRR. This makes the modified internal rate of return a better indicator of a project's true profitability.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
