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Instant Calculation
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Ordinary IRR assumes every interim positive cash flow gets reinvested at the IRR itself — often unrealistic. MIRR fixes this by discounting negative cash flows back to today at a chosen finance rate, and compounding positive cash flows forward to the final period at a chosen reinvestment rate, then solving a single compound-growth equation between the two totals.
How it works
Enter each year's cash flow (negative for outflows, positive for inflows), a finance rate, and a reinvestment rate. Negative flows are discounted to year 0; positive flows are compounded to the final year; MIRR is the rate that grows the discounted outflow total into the compounded inflow total.
- Enter cash flow — Year 0.
- Enter cash flow — Year 1.
- Enter cash flow — Year 2.
- Enter cash flow — Year 3.
- Enter cash flow — Year 4 (optional).
- Enter cash flow — Year 5 (optional).
- Enter cash flow — Year 6 (optional).
- Enter finance rate (%).
- Enter reinvestment rate (%).
- Click Calculate to see your results.
Examples
A simple 4-year project
An initial $1,000 investment followed by inflows of $200, $300, $400, $500 (finance rate 10%, reinvestment rate 12%) gives a MIRR of about 12.56%.
Who should use it
- Comparing capital projects with very different cash flow timing.
- Capital budgeting decisions where reinvestment assumptions matter.
Industry applications
- Corporate finance and capital budgeting
- Investment analysis
Advantages
- More realistic than plain IRR for projects with interim cash flows.
- Always gives a single, unambiguous rate (unlike IRR, which can have multiple solutions for unconventional cash flow patterns).
Limitations
- Requires choosing two rates instead of one, adding a layer of judgment.
Common mistakes to avoid
- Using the same rate for both financing and reinvestment — the point of MIRR is that these can genuinely differ.
Best practices
- Set the reinvestment rate to your actual expected return on interim cash (e.g. your cost of capital), not an optimistic guess.
Tips
- Use the NPV Calculator alongside MIRR — a positive NPV and MIRR above your cost of capital should usually agree on whether to accept a project.