MIRR Calculator – Modified Internal Rate of Return
Results are estimates based on the values you enter. Recheck your inputs and assumptions before using the output for decisions.
Calculate modified internal rate of return from an initial investment, yearly cash flows, finance rate, and reinvestment rate.
MIRR Calculator – Modified Internal Rate of Return
Free online MIRR calculator to estimate modified internal rate of return from an initial investment, yearly cash flows, finance rate, and reinvestment rate. This calculator is useful for investors, business owners, finance students, analysts, project managers, and anyone comparing projects where cash flows arrive over several years. MIRR is often preferred over basic IRR because it separates the cost of financing from the rate at which positive cash flows can realistically be reinvested. That usually makes the result more practical for real-world capital budgeting.
This calculator uses an initial investment, five yearly cash flows, finance rate, and reinvestment rate. Initial investment means the upfront cost of the project. The yearly cash flows mean the expected money received or paid in each of the next five years. Finance rate means the rate used to discount negative cash flows. Reinvestment rate means the rate used to compound positive cash flows forward to the final year. Once those values are entered, the calculator shows MIRR, terminal value of positive cash flows, present value of negative cash flows, and modified value multiple. These outputs help explain both the rate result and the cash flow mechanics behind it.
The formula of MIRR
Terminal value of positive cash flows = Sum of positive cash flows compounded to the final year at the reinvestment rate
Present value of negative cash flows = Initial investment plus any later negative cash flows discounted at the finance rate
MIRR = (Terminal value of positive cash flows / Present value of negative cash flows)^(1 / n) – 1
Modified value multiple = Terminal value of positive cash flows / Present value of negative cash flows
Here n means the number of periods, finance rate means the cost of funding negative cash flows, reinvestment rate means the assumed return on positive cash flows until the end of the project, terminal value of positive cash flows means the future value of inflows carried to the last year, present value of negative cash flows means the discounted cost base of outflows, and MIRR means the modified annual return implied by those adjusted cash flow values.
Solved Example
Example 1: Find MIRR if the initial investment is $10,000, yearly cash flows are $3,000, $3,500, $4,200, $4,500, and $4,800, finance rate is 8%, and reinvestment rate is 10%.
Solve: Present value of negative cash flows = $10,000
Terminal value of positive cash flows = about $23,882.80
MIRR = (23882.80 / 10000)^(1/5) – 1 = 19.0192%
Modified value multiple = 23882.80 / 10000 = 2.3883
Example 2: Find the result if the initial investment is $25,000, yearly cash flows are $7,000, $8,000, $9,000, $10,000, and $11,000, finance rate is 9%, and reinvestment rate is 11%.
Solve: Present value of negative cash flows = $25,000
Terminal value of positive cash flows = about $54,756.44
MIRR = (54756.44 / 25000)^(1/5) – 1 = 16.9766%
Modified value multiple = 54756.44 / 25000 = 2.1903
Example 3: Find the result if the initial investment is $50,000, yearly cash flows are $12,000, $14,000, $16,000, $18,000, and $20,000, finance rate is 7%, and reinvestment rate is 8%.
Solve: Present value of negative cash flows = $50,000
Terminal value of positive cash flows = about $92,064.24
MIRR = (92064.24 / 50000)^(1/5) – 1 = 12.9859%
Modified value multiple = 92064.24 / 50000 = 1.8413
Table of MIRR calculator
| Initial Investment | Finance Rate | Reinvestment Rate | MIRR | Modified Value Multiple |
|---|---|---|---|---|
| $10,000 | 8% | 10% | 19.0192% | 2.3883 |
| $15,000 | 6% | 9% | 14.4140% | 1.9606 |
| $25,000 | 9% | 11% | 16.9766% | 2.1903 |
| $50,000 | 7% | 8% | 12.9859% | 1.8413 |
How to use this MIRR calculator
Enter the initial investment in the proper input field. After that, enter the yearly cash flows for year 1 through year 5. Then enter the finance rate and reinvestment rate. Click the calculate button and the calculator will show MIRR, terminal value of positive cash flows, present value of negative cash flows, and modified value multiple in the result box.
This calculator is useful when a plain IRR can be misleading because it assumes reinvestment at the IRR itself. MIRR gives a more realistic return measure by separating funding cost from reinvestment assumptions. That makes it especially helpful in project evaluation, capital budgeting, real estate analysis, equipment purchase decisions, and corporate finance comparison where analysts want a rate that better reflects practical financing and reinvestment conditions.
When using the result, remember that MIRR still depends on the quality of the cash flow forecast and the reasonableness of the finance and reinvestment rates chosen. Different assumptions can materially change the outcome. Even so, MIRR remains one of the clearest improved alternatives to plain IRR when reinvestment assumptions matter. This calculator gives a practical estimate that supports project comparison, investment review, budgeting, and finance learning.