MIRR Calculator (Modified Internal Rate of Return)
The modified internal rate of return of a project with up to five years of cash flows, assuming inflows are reinvested at one rate and outflows are financed at another.
Results
The dashed line marks the value you entered.
What this tool does
The ordinary IRR quietly assumes every cash flow is reinvested at the IRR itself, which flatters a project with a very high return and can give several answers when cash flows change sign. MIRR removes that: it compounds all inflows to the end at a realistic reinvestment rate, discounts all outflows to today at the finance rate, and takes the single growth rate that links the two. It matches the MIRR function in spreadsheets. The result is lower than the IRR for a profitable project, and a more honest figure to compare with your cost of capital.
Formula
MIRR = (FV of inflows at the reinvestment rate ÷ PV of outflows at the finance rate)^(1/n) − 1
Variables
| Symbol | Meaning | Unit |
|---|---|---|
i0 | Initial investment (enter as a positive number) | — |
c1 | Cash flow, year 1 (negative for a cost) | — |
c2 | Cash flow, year 2 | — |
c3 | Cash flow, year 3 | — |
c4 | Cash flow, year 4 | — |
c5 | Cash flow, year 5 | — |
n | Years the project lasts (1 to 5) | a |
fr | Rate you pay on money you borrow (finance rate) | % |
rr | Rate you earn when you reinvest the inflows | % |
M | Modified IRR (MIRR) | % |
FV | Inflows compounded to the end | — |
PV | Outflows brought back to today | — |
Worked example
- Initial investment (enter as a positive number)10,000
- Cash flow, year 1 (negative for a cost)3000
- Cash flow, year 24000
- Cash flow, year 3-1000
- Cash flow, year 46000
- Cash flow, year 55000
- Years the project lasts (1 to 5)5 a
- Rate you pay on money you borrow (finance rate)6 %
- Rate you earn when you reinvest the inflows4 %
- Modified IRR (MIRR)12.17 %
- Inflows compounded to the end19,249.03
- Outflows brought back to today10,839.62
Limitations
- This is an informational calculator, not personalised financial advice. Rates, fees, taxes and contract conditions vary between institutions and countries.
- The rate is the one you type. Nothing is fetched from the internet, so the result is exactly as current as the number you entered.