This webpage discusses comments by the Amsterdam Institute of Finance that the IRR is B.S. As the IRR is the principle output of a project model, alternatives to the IRR are discussed. I demonstrate that the MIRR alternative has more problems than the IRR and that the NPV does not give you any other information. The IRR is a performance statistic and professor’s who complain about it are simplistic.
This is the e-mail that got me going. Apparently AIF likes its teachers to swear at its participants so they can show how arrogant they are. This silly comment that the IRR is B.S. is really irritating because there suggestions of an alternative are not there.
The Problem with IRR Alternatives — You Need the Cost of Capital
Re-Investment Rates and MIRR
The only alternative that is typically suggested to the IRR, is to use the MIRR. This method does nothing other than measure the re-investment rate assumption on your key performance measure. Maybe that is why nobody really uses it.