Small business answers — NOW!

Modified internal rate of return definition

Question
What is a modified internal rate of return (MIRR)? 
Answer
The modified internal rate of return (MIRR) is a calculation that is used to evaluate the quality of a prospective investment opportunity. The calculation assumes that all cash flows from the investment are reinvested at the current cost of capital, rather than at the rate produced by the investment, which is a conservative step that differentiates it from the internal rate of return (IRR).

Most financial analysts consider the MIRR to be a more prudent method of evaluating the future returns for a given investment opportunity. Most electronic financial analytical programs will produce the MIRR.

Search again for the internal rate of return. 
 
© 2007, Small Business Network, Inc., All Rights Reserved.
Subject to the Terms of Use of AskJim.biz
Print this page   Bookmark this page   E-mail this page to a friend   Go back to previous page
AskJim ID: 6355