Corporate finance
Modified Internal Rate of Return (MIRR) Calculator
Use separate finance and reinvestment rates to estimate a modified return.
Results
Enter values and press Calculate to see an explanation.
Result interpretation
MIRR treats outflows and inflows with separate rates rather than an implicit IRR reinvestment assumption; both rates remain assumptions.
Read the learning guide →FORMULA
Formula
Compound positive flows to the final year, discount negative flows to year zero, and annualize their ratio.
Variables and limits
N is the last cash-flow year. Positive flows compound to N at the reinvestment rate; negative flows discount to year 0 at the finance rate. Flows occur at year end and both rates remain fixed.
WORKED EXAMPLE
Example
- Enter initial outlay 1,000, year-1 inflow 500, and year-2 inflow 700.
- At a 10% finance rate and 8% reinvestment rate, positive flows compound to 500×1.08+700 = 1,240 at year 2.
- Negative-flow PV is 1,000; MIRR = (1,240/1,000)^(1/2)−1 ≈ 11.36%.
Frequently asked questions
How does MIRR differ from IRR?
MIRR explicitly specifies reinvestment and finance rates; IRR solves for a rate that makes NPV zero.
Can MIRR be calculated with multiple IRRs?
With positive and negative flows and valid rates, MIRR can be calculated; the comparison will not arbitrarily choose one IRR root.
Can the two rates differ?
Yes. Negative flows are discounted to year 0 and positive flows compounded to the final year using separate assumptions.