Register now or log in to join your professional community.
Dear sir,
The question has to be a little more precise, as there are several kinds of rate of returns.
The most famous one is the Internal Rate of Return, which is in this case13.59%, but which supposes that all intermediate cashflows are reinvested at the IRR level till the end of the investment life, which means in this case that the first200K is reinvested at13,59% Return for the remaining9 years, the second200k for the remaining8 years and so on, in order to achieve the IRR.
Therefor, the Modified Rate of Return, a more realistic indicator, includes another parameter, which is the reinvestment rate of intermediate cashflows. In this example, let's say that the reinvestment rate equals the deposit account interest rate of2% (The most safe investment), the MIRR gives then8.02%.
At yours service
Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.