IRR is likely the single-most misunderstood financial metric. I touched on this very topic in my recent book, Advanced Discounted Cash Flow (DCF) Valuation Using R. My presumption lies in the fact it is taught incorrectly in most finance texts. Ask anyone the meaning of IRR, and you will invariably hear a recitation of the textbook definition, 'that discount rate that causes NPV =0.' That is absolutely not the definition of IRR. That simply explains one how it is calculated.

The academic community has derived all sorts of 'meaningless fixes' to address conflict between IRR and NPV (NPV Profiles, crossover rates, MIRR, etc.).

When a project is analyzed correctly, there is never disagreement between NPV and IRR, and it has nothing to do with MIRR. Also, the Profitability Index (PI) is a suboptimal ranking mechanism when capital is constrained.