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IRR v. MIRR Valuation Methods - Research Paper Example
Finance & Accounting
Pages 9 (2259 words)
IRR v. MIRR Valuation Methods and Number Date Submitted Abstract A contentious debate ranges with regard to business valuations using Internal Rate of Return (IRR) and Modified Internal Rate of Return (MIRR)…
However, the MIRR valuation method still exhibits a number of limitations noticeable with the use of IRR technique, for instance, its inability to value investments that are mutually exclusive. Additionally, the teaching of both IRR and MIRR in learning institutions has been a cause of concern, with claims that the IRR technique has had more attention at the expense of the MIRR valuation method. This paper focuses on analyzing IRR and MIRR with regard to major issues of concern, emerging issues, factors that have been instrumental in the understanding of IRR and MIRR in class situations, and present and future applications of the two valuation methods. Keywords: IRR (Internal Rate of Return), MIRR (Modified Internal Rate of Return), NPV (Net Present Value) Table of Contents Abstract 2 Table of Contents 3 introduction 3 Main issues in IRR 4 Main issues in MIRR 6 New Learning in IRR 6 New Learning in MIRR 7 Class activities that have facilitated learning and understanding of IRR and MIRR 8 Specific current and future applications and 8 relevance in the workplace 8 Conclusion 10 References 11 introduction The pertinent question in the discussion about IRR and MIRR valuation methods lies in the differences that exist between the two investment appraisal methods. ...