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Hi John,
A basic question. Whats the assumption of MIRR, what rate does it reinvest in?
And what is the difference between IRR and MIRR?
Thanks.
MIRR assumes reinvestment at the cost of capital; IRR assumes reinvestment at the IRR.
That is the difference (and obviously the calculations are different!)
Sir, lets say we are having non conventional cash flow in a project, say
yr 0 1000 outflow
yr 1 and 2 1500 inflow
yr 3 500 outflow
should the yr 3 500 outflow under investment phase or return phase?
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