search query: @indexterm CASH FLOW / total: 488
reference: 148 / 488
Author: | Anderson, G. Barber, J. |
Title: | Project holding-period rate of return and the MIRR |
Journal: | Journal of Business Finance and Accounting
1994 : JUN, VOL. 21:4, p. 613-618 |
Index terms: | RATE OF RETURN CASH FLOW CAPITAL COSTS |
Language: | eng |
Abstract: | In this paper the authors examine the relationship between the Modified Internal Rate of Return (MIRR) and a project's expected holding-period rate of return assuming that cash flows are reinvested at the cost of capital. When cash flows are uncertain, the MIRR overstates expected holding-period rate of return. The relationship between the MIRR and a project's expected holding-period rate of return is shown to be a simple function of conventional project statistics like the coefficient of variation of the present value of random cash flow, the profitability index, the cost of capital, and the project's life. |
SCIMA