Modified Internal Rate of Return | MIRR | FIN-Ed

#fin-ed Modified Internal Rate of Return | MIRR | FIN-Ed This video is about how to calculate the modified internal rate of return or MIRR using a Texas BA II Plus financial calculator. MIRR is the discount rate at which the present value of a project’s costs is equal to the present value of its terminal value. Terminal value is defined as the sum of future values of all cash inflows. Some projects may have non-normal cash flows and, thus, may have multiple IRRs. In such a situation, project selection might be erroneous or misleading. In order to avoid multiple IRR problems, it is always better to use the MIRR technique while accepting or rejecting a project. Example: Your division is considering two projects with the following cash flows (in millions). If WACC is 10%, What are the projects’ MIRR and which project will you accept? Source: Fundamentals of Financial Management (Concise Edition) Brigham and Houston Chapter 11: The Basics of Capital Budgeting Problem: 11-6 ========Recommended Videos============= Payback period:    • How to calculate payback period | FIN-Ed   Discounted Payback period:    • Discounted Payback Period Calculation | FI...   Net Present Value (NPV):    • Net present value on ba ii plus | NPV | FI...   Internal Rate of Return (IRR):    • Internal Rate of Return on ba ii plus | IR...   Crossover Rate:    • Crossover rate calculation | Crossover rat...   ======================================== Thanks for watching...!!!