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Financial function

MIRR

Returns a modified IRR that assumes a reinvestment rate.

OccasionalDifficulty 1500 · AdvancedUsage rank #228 of 520
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When to use it

Modified internal rate of return: assumes negative flows are financed at one rate and positive flows reinvested at another. A more realistic project return than IRR.

The shape of it

Syntax
=MIRR(values, finance_rate, reinvest_rate)

Worked examples

  • Project return

    =MIRR({-1000,300,400,500},0.08,0.1) → 9.22%

    Financed at 8%, reinvested at 10%.

  • Single rate

    =MIRR(B2:B6,0.08,0.08) → 12.1%

    Same rate for both.

  • Conservative

    =MIRR(B2:B6,0.06,0.04) → 10.4%

    Conservative reinvestment.

Worth knowing

  • Always gives one answer, unlike IRR with multiple sign changes.
  • Reinvestment rate is usually the cost of capital.
  • Periods must be equal.

Where it goes wrong

  • #DIV/0! when all flows have the same sign.
  • Text in the range is ignored.

Related

PMTNPVIRRIPMTPPMTPV

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