What is reinvestment assumption?
IRR’s built-in premise that interim cash flows compound at the IRR itself, often unrealistic for high IRRs or large early distributions. The flaw MIRR repairs with an explicit reinvestment rate.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.