Modified internal rate of return:
A)handles the multiple IRR problem by combining cash flows until only one change in sign change remains.
B)requires the use of a discount rate.
C)does not require the use of a discount rate.
D)Both A and B.
E)Both A and C.

Question

Quizplus · Accepted Answer

The modified internal rate of return (MIRR) handles the multiple IRR problem by combining cash flows until only one change in sign change remains, which is the same as option A. MIRR also requires the use of a discount rate, which is the same as option B. Therefore, both options A and B are correct, making option D the best choice. Option C is incorrect because MIRR does require the use of a discount rate.

Modified Internal Rate of Return