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

question 10

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.

---

Definitions:

Checkbook

A book containing blank checks and a register for recording checks written and deposits made.

Electronic Conveniences

Tools and services provided digitally that simplify tasks and transactions, often making daily activities more efficient through technology.

Financial Statement

A proper journal that captures the flow of financial transactions and the economic positioning of an entity, whether a business, an individual, or another type.

Normal Balance

The side of an account (debit or credit) that increases its value; for example, assets and expenses have normal debit balances, while liabilities and revenues have credit balances.