Concepts of terminal value and modified internal rate of return
Explain the concepts of terminal value and modified internal rate of return as they are applied to the management of medical projects. Provide a specific example related to your own work or professional interests.
Your response should be at least 200 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.
Terminal value is the value of an asset at a specified date in the foreseeable future after carefully considering different factors such as its current value or cost and the interest rates (Drake and Fabozzi, 2002). Terminal value is often reached at with the assumption that at tat future date, there will be a stable growth forever. Terminal value is used in the projections of cash flows over a long period of time to come.
Modified internal rate of return refers to how attractive an investment is (Drake and Fabozzi, 2002). It ideally reflects the profitability and cost of an undertaking or project. The value obtained after the computation of MIRR gives a realistic……………….