What's the easiest way to solve MIRR?
We invest $100,000 today and in return we receive $18,000 per year for 5 years, plus at the end of year 5 we sell the asset and get back $100,000. If we use the traditional Internal Rate of Return (IRR) calculation, we get an IRR of 18%.
As you may recall, one of the problems with the traditional IRR calculation is that it doesn?t account for the reinvestment of interim cash flows. So, how can we use the Modified Internal Rate of Return to eliminate this problem?
Jan 10, 2018EXPERT
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