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Sir can you tell me if this is correct.
1. IRR assume that cashflows are reinvested at irr however this creates a problem when comparing if projects of different lengths.
but when using MIRR it makes it comparable because it assumes cashflow are reinvested at the cost of capital. The minimum return the company would want. there fore the lengths of the project would matter(effectively reinvesting at the cost of capital forever)2. What MIRR with 10% mean sir? Is this the return that the company gives?
1. That is correct.
2. It doesn’t actually mean much. As I explain in my lectures on this, the MIRR gives a way of explaining why the project with the higher MIRR is the best project that will always agree with the fact that the project with the higher NPV will be the best project.
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