Terminal Value =


Internal Rate of Return = 24.89% Modified Internal Rate of Return = 21.23%

Modified Internal Rate of Return = ($2160/$1000)1/4 -1 = 21.23% The modified internal rate of return is lower than the internal rate of return because the intermediate cash flows are invested at the hurdle rate of 15% instead of the IRR of 24.89%.

There are many who believe that the MIRR is neither fish nor fowl, since it is a mix of the NPV rule and the IRR rule. From a practical standpoint, the MIRR becomes a weighted average of the returns on individual projects and the hurdle rates the firm uses, with the weights on each depending on the magnitude and timing of the cash flows - the larger and earlier the cash flows on the project, the greater the weight attached to the hurdle rate. Furthermore, the MIRR approach will yield the same choices as the NPV approach for projects of the same scale and lives.

Retirement Planning For The Golden Years

Retirement Planning For The Golden Years

If mutual funds seem boring to you, there are other higher risk investment opportunities in the form of stocks. I seriously recommend studying the market carefully and completely before making the leap into stock trading but this can be quite the short-term quick profit rush that you are looking for if you am willing to risk your retirement investment for the sake of increasing your net worth. If you do choose to invest in the stock market please take the time to learn the proper procedures, the risks, and the process before diving in. If you have a financial planner and you definitely should then he or she may prove to be an exceptional resource when it comes to the practice of 'playing' the stock market.

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