Which of the following is NOT a valid method of modifying cash flows to produce a MIRR?
A) Discount all of the negative cash flows to time 0 and leave the positive cash flows alone.
B) Leave the initial cash flow alone and compound all of the remaining cash flows to the final period of the project.
C) Discount all of the negative cash flows to the present and compound all of the positive cash flows to the end of the project.
D) Turn multiple negative cash flows into a single negative cash flow by summing all negative cash flows over the project's lifetime.

Question

Quizplus · Accepted Answer

The Modified Internal Rate of Return (MIRR) method involves either discounting all negative cash flows to the present (time 0) or compounding all positive cash flows to the end of the project period. It does not involve summing all negative cash flows into a single negative cash flow without adjusting for the time value of money, as this would not accurately reflect the project's financial performance.

Which of the Following Is NOT a Valid Method of Modifying