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Hi Sir,
For MIRR, if there is multiple cost of capital, we cannot use the MIRR formula given in formula sheet. Hence, we will use the method of taking into account the opportunity cost of each year since there are different cost of capital each year till the terminal value and then use IRR method. However, if I were to use discount factor of 5% and 10% to find out the MIRR, the result differs from discount factor of 10% and 20%. Is that normal to give different answers ?
Hi Sir,
What I meant is the compute terminal value (incorporating opportunity cost of capital into cashflows) then compute IRR in the normal way. If i use DF of 10% and 20%, the answer I get is different from DF 5% and 10%. So is it normal to get different answers due to different discount factors being used?
Meaning my final answer for MIRR using DF of 5%, 10% is different from MIRR using DF 10% and 20%.
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