Modified Internal Rate of Return


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Modified Internal Rate of Return

A form of the internal rate of return that assumes all returns are reinvested at a company's cost of capital. As such, it measures the profitability, as opposed to the raw cash flow, of an investment or project. It is considered a more accurate way of measuring the net present value of future cash flows.
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1: CZ Financial models used in appraising the most recent ICT project Model: (n = 74) Ranked (a) (b) 1st 2nd Payback discounted + conventional * 66 63 37 20 Payback (conventional / non-discounted 48 46 27 14 figures) (PB) Net Present Value (NPV) 29 27 15 6 Return on investment / Accounting rate 24 22 13 4 of return (ROI/ARR) Discounted Payback (using discounted 18 17 10 6 figures) (DPB) Internal Rate of Return + Modified 14 12 4 4 Internal Rate of Return * Internal Rate of Return (IRR) 14 12 4 4 Other 5 4 3 0 Profitability Index (PI) 5 4 1 1 Modified Internal Rate of Return (MIRR) 0 0 0 0 Model: Ranked Ranking 3rd 4th Payback discounted + conventional * 6 0 2.
Consequently, financial economists and investors use a wide variety of terms to describe returns in these different contexts, such as total return, holding-period return, annualized return, simple return, compound return, arithmetic average return, geometric average return, time-weighted return, dollar-weighted return, nominal return, real (inflation-adjusted) return, risk-adjusted return, after-tax return, taxable-equivalent return, internal rate of return, and various modified internal rate of return measures.
Financial analysis includes advanced annuity, loan, and amortization in the Time Value of Money worksheet, cash flows for Net Present Value, Internal Rate of Return, Payback Modified Internal Rate of Return, price or yield of bonds, Depreciation (Straight-line, Declining Balance, and Sum of Years), unit and currency conversions, percent change, markups and ma rkdowns, profit margin, a Black-Scholes option pricing worksheet, and so on.
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