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Internal Rate of Return

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Internal Rate of Return

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • August 4, 2021 at 4:25 am #630327
    zaki090
    Member
    • Topics: 5
    • Replies: 5
    • ☆

    I cant understand the following assumption;

    “Traditional internal rate of return (IRR) assumes the cash flows from a project are reinvested at the IRR itself.”

    “The modified internal rate of return (MIRR) assumes that positive cash flows are reinvested at the firm’s cost of capital”

    In the first definition, What does it mean by “reinvested at the irr itself”? please give a practical example ?

    Also give an example on Modified IRR 🙁

    August 4, 2021 at 8:26 am #630342
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54753
    • ☆☆☆☆☆

    You asked this question yesterday and I answered you yesterday.

    As I wrote in my reply, MIRR is not examined until Paper AFM and you can find an example in my free Paper AFM lectures on MIRR. You cannot expect me to type out my lectures here 🙂

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  • The topic ‘Internal Rate of Return’ is closed to new replies.

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