One of the Investment Project:
\mbox{MIRR} = \sqrt[n]{ \frac{FV[CF^+]}{-PV[CF^-]}} } - 1 |
The usual practise is to give preferences to the Investment Projects with higher IRR and make a direct comparison of IRR against the Weighted Average Cost of Capital (WACC).
The corporate investment policy usually dictates that:
- Investment Projects with IRR < WACC should be rejected
- Investment Projects with higher IRR should have a financing priority over the Investment Projects with lower IRR
See also
Economics / Investment / Financial Investment / Financial Investment Metrics
[ Financial Investment Project ]
[ Weighted Average Cost of Capital (WACC) ] [ Cash Discount ] [ Net Present Value (NPV) ]
[ Internal Rate of Return (IRR) ]