There were analyzed characteristics of the Modified Internal Rate of Return method in the evaluation of investment projects, restrictions connected with its application, advantages and disadvantages compared with indicators of the original Internal Rate of Return and Net Present Value for projects with certain baseline characteristics. It was determined opportunities to adapt the method of Modified Internal Rate of Return to alternative computational approaches of the project cash flows evaluation.

Keywords: modified internal rate of return, сash flows, investments efficiency, evaluation, investment projects.

DOI: http://dx.doi.org/10.17721/1728-2667.2014/161-8/11

References

1. Bierman, H. and Smidt, S. (2003), Kapitalovlozhenija. Jekonomicheskij analiz investicionnyh proektov [The Capital Budgeting Decision. Economic Analysis of Investment Projects], Juniti-Dana, Moscow, Russia.
2. Brigham, E. and Gapenski, L. (2004), Ю. Finansovyj menedzhment [Financial Management], part 1, Jekonomicheskaja shkola, St. Petersburg, Russia.
3. Van Horne J. C. (2005) Osnovy upravlenija finansami [Fundamentals Of Financial Management], Finansy i statistika, Moscow, Russia.
4. Vilenskij, P. L., Livshic, V. N. and Smoljak, S. A. (2002), Ocenka jeffektivnosti investicionnyh proektov: teorija i praktika [Evaluation of Investment Projects Effectiveness: Theory and Practice], 2nd ed, Delo, Moscow, Russia.
5. Training materials online (2014), Lectures on “Investment Analysis”, available at: http://pidruchniki.com/ 10780621/investuvannya/modifikovana_vnutrishnya_norma_dohodnosti (Accessed 15 April 2014).
6. Kravchenko, S. (2003), “Justification of the Conditions to Finance Innovative Solutions”, Ekonomika Ukrainy, vol. 2, pp. 41–46.
7. Kukhta, P. (2013), “Modern Computational Approaches to Investment Project Cash Flows Evaluation”, Formation of Market Economy in Ukraine, vol. 29, part 1, pp. 323–329.
8. Chervanyov, D. M., Zhylinska, O. I. and writing team (2011), Mizhdystsyplinarnyj slovnyk z menedzhmentu [Interdisciplinary Dictionary of Management], Nichlava, Kyiv, Ukraine.
9. Rastiapin, A. V. (2001), “Methods of Assessing Investment Projects’ Economic Efficiency”, Finansy Ukrainy, vol. 2, pp. 111–118.
10. Savchuk, V. P. (2014), “Evaluation of Investments’ Effectiveness in Countries with Transition Economy”, Korporativnij menedzhment – Teorija i praktika finansovogo analiza, investicii, menedzhment, finansy i dr., available at: http://www.cfin.ru/finanalysis/invest/invest_emerging.shtml (Accessed 15 April 2014).
11. Chervanyov, D. M. (2012), Systema innovatsijnoho menedzhmentu: teoriia i praktyka [System of innovation management: theory and practice], Vydavnycho-polihrafichnyj tsentr “Kyivs’kyj universytet”, Kyiv, Ukraine.
12. Boulding, K. E. (1936), “Time and Investment”, Economica. New Series, vol. 3, no. 10 (May), pp. 196–220, available at: http://www.jstor.org/stable/2549068 (Accessed 15 April 2014).
13. Brigham, E. F. and Daves P. R. (2007), Intermediate Financial Management, 9th ed., Thomson, South-Western Publish, Mason, Ohio, US.
14. Haberstock, L. (1972), “Kapitalwert oder Interner Zinsfuß? Stellungnahme zu dem Aufsatz von E. Hosterbach”, Zeitschrift für Betriebswirtschaft (ZfB), bd. 42, s. 216–218.
15. Hosterbach, E. (1972), “Kapitalwert oder Interner Zinsfuß? Gleichzeitig eine Entgegnung an L. Haberstock”, Zeitschrift für Betriebswirtschaft (ZfB), bd. 42, s. 201–216.
16. Kierulff, Herbert (2008), “MIRR: A Better Measure”, Business Horizons, vol. 51, pp. 321–329.
17. Kruschwitz, L. (2011), Investitionsrechnung, 13 Auflage, Oldenbourg-Verlag, München, Germany.
18. Lin, S. A. Y. (1976), “The Modified Internal Rate of Return and Investment Criterion”, The Engineering Economist, vol. 21 (4), pp. 237–247.
19. Lorie, James H. and Savage, Leonard J. (1955), “Three Problems in Rationing Capital”, The Journal of Business, vol. 28, рр. 229–239.
20. Wright, C. A. (1936), “A Note on “Time and Investment””, Economica. New Series, vol. 3, no. 12 (Nov.), pp. 436–440.