Title

MIRR: The Means to an End? Reinforcing Optimal Investment Decisions Using the NPV Rule

Authors

R. Brian Balyeat, Xavier University - CincinnatiFollow
Julie Cagel, Xavier University - CincinnatiFollow

Document Type

Article

Publication Title

Journal of Financial Education

Volume

41

Issue

1

First Page

90

102

Publication Date

Spring 2015

Abstract

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.

Recommended Citation

Balyeat, R. Brian and Cagel, Julie, "MIRR: The Means to an End? Reinforcing Optimal Investment Decisions Using the NPV Rule" (2015). Faculty Scholarship. 56.
https://www.exhibit.xavier.edu/finance_faculty/56