A Pedagogical Note on Modified Internal Rate of Return


Practitioners prefer IRR over NPV, despite the advocated superiority of the NPV method in financial literature. We illustrate that academics have devised a percentage evaluator, MIRR, that is better than the regular IRR. We then describe inadequate coverage of MIRR in most established corporate finance texts, given its worthy qualities. Future students of corporate finance should be equipped with this viable analysis method in light of increasing ease of use of electronic spreadsheets. We provide information and suggestions for using the MIRR function in currently available spreadsheets. We also provide recommendations for makers of financial calculators and for future surveys. [ABSTRACT FROM AUTHOR] Copyright of Financial Practice & Education is the property of Financial Management Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)


Finance and General Business

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Financial Practice & Education