Journal of Financial Education
Unlike other investment decision techniques, Modified Internal Rate of Return (MIRR) has yielded mixed academic opinions. MIRR is sometimes heralded as a superior decision rule, sometimes seen as having little value, and sometimes ignored altogether. We offer an alternative view; that the value of MIRR lays in improving students’ understanding of net present value (NPV) as the primary decision criteria for investment decisions. Results of a classroom experiment support MIRR’s pedagogical value for reinforcing the NPV rule.
Balyeat, R. Brian and Cagel, Julie, "MIRR: The Means to an End? Reinforcing Optimal Investment Decisions Using the NPV Rule" (2015). Faculty Scholarship. Paper 56.