For a Project with One Initial Cash Outflow Followed by a Series

question 70

True/False

For a project with one initial cash outflow followed by a series of positive cash inflows, the modified IRR (MIRR) method involves compounding the cash inflows out to the end of the project's life, summing those compounded cash flows to form a terminal value (TV), and then finding the discount rate that causes the PV of the TV to equal the project's cost.

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Definitions:

1/1,000,000

A mathematical fraction denoting one part per million (ppm), often used to measure concentration levels in chemistry and environmental science.

Denominator

The denominator is the bottom part of a fraction, used to calculate a part of a whole.

Fraction

A numerical expression of the number of portions of a whole by using the number of portion over the designated whole number, as in 1/8 or “one-eighth.”