A capital budgeting method that converts a project's cash flows using a more consistent reinvestment rate prior to applying the IRR decision rule is referred to as
A) IRR.
B) EAR.
C) NPV.
D) MIRR.

Question

Quizplus · Accepted Answer

The Modified Internal Rate of Return (MIRR) is a capital budgeting method that addresses the reinvestment rate assumption issue of the traditional Internal Rate of Return (IRR) by assuming reinvestment at a more consistent rate, typically the firm's cost of capital.

A Capital Budgeting Method That Converts a Project's Cash Flows