I. Intro
The MIRR function calculates the modified internal rate of return based on the difference between the financing rate for a series of cash flows and reinvestment return.
Note: The modified internal rate of return calculates the internal rate of return for expenditure and income with different interest rates. It also takes into account investment costs and cash reinvestment return.
II. About the function
- Formula: =MIRR(values,finance_rate,reinvest_rate)
- Parameters:
- values (required): Array or range of income or expenditure related to an investment.
- finance_rate (required): The interest rate for invested capital.
- reinvest_rate (required): The interest rate for reinvested capital.
- Example: =MIRR(A2:A25,8%,11%)
- Note:
- The values parameter should be an array or a range. It cannot be a single number.
- The MIRR function returns the order of the cash flow based on the order of the values entered. Make sure the expenditure and income amounts entered are based on their actual order, and ensure the right signs are used (positive for incoming cash flow and negative for outgoing cash flow).
III. Steps
Use the MIRR function
- Select a cell and enter =MIRR.
- Enter the parameters in the cell. For example: =MIRR(B2:B7,B8,B9).
- Press Enter to get the result, which is 13% in this example.
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Delete the MIRR function
Select the cell with the MIRR function, and press Delete.