MIRR discount rate

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September 4, 2019 at 9:32 am #544650
Anonymous
Inactive
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Hello,

I have an exercise in which I need to calculate IRR & MIRR.
While calculating IRR I used 10% & 15% to end up with IRR of, let’s say 13%.

Which rate I should use to calculate MIRR with help of standard MIRR equation:

[PVR/PVI]*1/n*(1+r)-1

…and if it is IRR, I assume that I must calculate PV of inflows/outflows with that rate as well…correct?

Thank you in advance for your help!

Regards,
PJ
September 4, 2019 at 12:10 pm #544701
John Moffat
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For the MIRR the rate you use in the formula is the cost of capital (not the IRR).
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