Question

For a project with one initial cash outflow followed by a series of positive cash inflows, the modified IRR (MIRR) method involves compounding the cash inflows out to the end of the project's life, summing those compounded cash flows to form a terminal value (TV), and then finding the discount rate that causes the PV of the TV to equal the project's cost.A) TrueB) False

Answer 1

B False

Step-by-step explanation:

Modified Internal Rate of Return(MIRR) is computed using the following steps:

• Compute the discounted cash flows.
• Sum all discounted cash flows to generate net present value (NPV).
• Compute IRR from NPV.