MODIFIED INTERNAL RATE OF RETURN Definition

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MODIFIED INTERNAL RATE OF RETURN is the rate of return which equates the initial investment with the terminal value, where the terminal value is the future value of the cash inflows compounded at the required rate of return (the opportunity cost of capital).

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PERPETUAL VALUATION see MARKET VALUE.

ECONOMICALLY FEASIBLE means that the benefit of tracing the cost (greater accuracy) outweighs the cost of doing so.

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