Purpose
Return value
Syntax
=MIRR(values,finance_rate,reinvest_rate)- values - Array or reference to cells that contain cash flows.
- finance_rate - Required rate of return (discount rate) as percentage.
- reinvest_rate - Interest rate received on cash flows reinvested as percentage.
How to use
The standard Internal rate of return function (IRR) assumes all cash flows are reinvested at the same rate as the IRR. The modified internal rate of return function (MIRR) accepts both the cost of investment (discount rate) and a reinvestment rate for cash flows received.
In the example shown, the formula in F6 is:
=MIRR(B5:B11,F4,F4)
In this example, we assume that the reinvestment rate is the same as the cost of capital, so we set both the finance_rate and reinvest_rate to the value in F4, which is 10%.
Notes
- The values array must contain at least one positive value and one negative value.
- Values should be in chronological order.
- MIRR assumes cash flows at regular periods.
Related functions
PV Function
The Excel PV function is a financial function that returns the present value of an investment. You can use the PV function to get the value in today's dollars of a series of future payments, assuming periodic, constant payments and a constant interest rate.
NPV Function
The Excel NPV function is a financial function that calculates the net present value (NPV) of an investment using a discount rate and a series of future cash flows.
IRR Function
The Excel IRR function is a financial function that returns the internal rate of return (IRR) for a series of cash flows that occur at regular intervals.
