How Does Modified Internal Rate of Return (MIRR)differ from IRR

question 35

Multiple Choice

How does modified internal rate of return (MIRR) differ from IRR?

• A)MIRR does not consider cash flows occurring after the cut-off date.
• B)MIRR uses NPV, IRR does not.
• C)MIRR calculates the PV of cash inflows and then divides by the PV of the investment.
• D)MIRR reduces the number of sign changes in a cash flow sequence.

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Definitions:

Opportunity Cost

Foregoing the opportunity for advantages from different choices by opting for a specific one.

Monetary Cost

Monetary cost refers to the total amount of money that is spent to purchase goods or services.

Opportunity Cost

The benefit that is missed or given up when an investor, individual, or business chooses one alternative over another.

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A type of beer that originates from Bavaria, Germany, known for its strict brewing laws and quality standards.