Teaching MIRR to Improve Comprehension of Investment Performance Evaluation Techniques: A Comment

John Hatem; Ken Johnston; Bill Z. Yang

Teaching MIRR to Improve Comprehension of Investment Performance Evaluation Techniques: A Comment

John Hatem, Ken Johnston, Bill Z. Yang

Finance

Research output: Contribution to journal › Article › peer-review

Abstract

Balyeat, et. al. (2013, this journal) suggest that IRR does not have a clear economic interpretation and that MIRR highlights the reinvestment assumptions of NPV and IRR thus increasing its value as a teaching tool. This comment addresses misconceptions found in the work of Balyeat, et. al. In particular, it reiterates the economic interpretation of IRR and reexamines the alleged reinvestment rate assumptions.

Original language	American English
Journal	Journal of Economics and Finance Education
Volume	12
State	Published - Jan 1 2013

Keywords

Economics
Finance
IRR
Investment performance
MIRR

DC Disciplines

Business Administration, Management, and Operations
Economics
Finance
Finance and Financial Management

Access to Document

http://www.economics-finance.org/jefe/volume12-2/13ArticleYang.pdf

Cite this

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title = "Teaching MIRR to Improve Comprehension of Investment Performance Evaluation Techniques: A Comment",

abstract = " Balyeat, et. al. (2013, this journal) suggest that IRR does not have a clear economic interpretation and that MIRR highlights the reinvestment assumptions of NPV and IRR thus increasing its value as a teaching tool. This comment addresses misconceptions found in the work of Balyeat, et. al. In particular, it reiterates the economic interpretation of IRR and reexamines the alleged reinvestment rate assumptions.",

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N2 - Balyeat, et. al. (2013, this journal) suggest that IRR does not have a clear economic interpretation and that MIRR highlights the reinvestment assumptions of NPV and IRR thus increasing its value as a teaching tool. This comment addresses misconceptions found in the work of Balyeat, et. al. In particular, it reiterates the economic interpretation of IRR and reexamines the alleged reinvestment rate assumptions.

AB - Balyeat, et. al. (2013, this journal) suggest that IRR does not have a clear economic interpretation and that MIRR highlights the reinvestment assumptions of NPV and IRR thus increasing its value as a teaching tool. This comment addresses misconceptions found in the work of Balyeat, et. al. In particular, it reiterates the economic interpretation of IRR and reexamines the alleged reinvestment rate assumptions.

KW - Economics

KW - Finance

KW - IRR

KW - Investment performance

KW - MIRR

UR - https://digitalcommons.georgiasouthern.edu/econ-facpubs/62

UR - http://www.economics-finance.org/jefe/volume12-2/13ArticleYang.pdf

M3 - Article

VL - 12

JO - Journal of Economics and Finance Education

JF - Journal of Economics and Finance Education

ER -

Teaching MIRR to Improve Comprehension of Investment Performance Evaluation Techniques: A Comment

Abstract

Keywords

DC Disciplines

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