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Modified Internal Rate of Return = MIRR

Created by Arthur Aslanyan (Nafta College), last modified on Sep 24, 2023

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One of the Investment Project:

$\begin{array}{l}\displaystyle \mbox{MIRR} = \sqrt[n]{ \frac{FV[CF^+]}{-PV[CF^-]}} } - 1\end{array}$

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) ]

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