Use this MIRR Calculator to estimate your investment’s annualized return based on its initial cost, annual cash flows, financing rate, and reinvestment rate. Enter your values to calculate the Modified Internal Rate of Return (MIRR) instantly.
Calculate the Modified Internal Rate of Return (MIRR) using your initial investment, annual cash flows, financing rate, and reinvestment rate. Results update automatically as you change the inputs.
Investment Details
Annual Cash Flows
Enter the amount received or paid at the end of each year. Positive amounts are receipts; negative amounts are additional investments or expenses.
The initial investment is treated as a cash outflow at year 0. Annual cash flows start at year 1.
MIRR Calculator Example
Suppose you invest $10,000 in a project and expect to receive the following cash flows over the next five years. Your financing rate is 10%, and your reinvestment rate is 8%.
| Investment Detail | Value |
|---|---|
| Initial investment | $10,000 |
| Year 1 cash flow | $2,500 |
| Year 2 cash flow | $3,000 |
| Year 3 cash flow | $3,500 |
| Year 4 cash flow | $4,000 |
| Year 5 cash flow | $4,500 |
| Financing rate | 10% |
| Reinvestment rate | 8% |
Enter these values into the calculator to find the MIRR. The result represents the investment’s annualized return under the specified financing and reinvestment assumptions.
How Is MIRR Calculated?
The Modified Internal Rate of Return considers two factors: the cost of financing negative cash flows and the return earned by reinvesting positive cash flows.
MIRR formula:
MIRR = (Future Value of Positive Cash Flows ÷ Present Value of Negative Cash Flows)^(1 ÷ n) − 1
Here, n is the number of periods in the investment.
MIRR vs. IRR
The Internal Rate of Return (IRR) assumes that cash flows are reinvested at the IRR itself. MIRR uses a separate reinvestment rate and financing rate, which can make it more practical when evaluating projects with different investment assumptions.
When Should You Use MIRR?
MIRR can help you compare investment projects, evaluate business proposals, and estimate the annualized return on a project with multiple cash flows. For a meaningful comparison, use consistent financing rates, reinvestment assumptions, and investment periods.
Disclaimer: This calculator provides an estimate based on the values entered. Actual investment returns may differ, and the result should not be treated as financial advice.