Advanced Excel Financial - MIRR Function

Description

The MIRR function returns the modified internal rate of return for a series of periodic cash flows. MIRR considers both the cost of the investment and the interest received on reinvestment of cash.

Syntax

MIRR (values, finance_rate, reinvest_rate)

Arguments

Argument Description Required/ Optional
Values

An array or a reference to cells that contain numbers. These numbers represent a series of payments (negative values) and income (positive values) occurring at regular periods.

Values must contain at least one positive value and one negative value to calculate the modified internal rate of return. Otherwise, MIRR returns the #DIV/0! error value.

If an array or reference argument contains text, logical values, or empty cells, those values are ignored. However, cells with the value zero are included.

 Required
Finance_rate The interest rate you pay on the money used in the cash flows. Required
Reinvest_rate The interest rate you receive on the cash flows as you reinvest them. Required

Notes

  • If n is the number of cash flows in values, frate is the finance_rate, and rrate is the reinvest_rate, then the formula for MIRR is −

    $$\left ( \frac{-NPV\left ( rrate, \: values\left [ positive \right ] \right )*\left ( 1+rrate \right )^n}{NPV\left ( frate, \: values\left [ negative \right ] \right )*\left ( 1+frate \right )} \right )^{\frac{1}{n-1}}-1$$

  • MIRR uses the order of values to interpret the order of cash flows. Be sure to enter your payment and income values in the sequence you want and with the correct signs (positive values for cash received, negative values for cash paid)

  • If the specified values array does not contain at least one negative and at least one positive value, MIRR returns #DIV/0! Error.

  • If any of the specified arguments is a non-numeric value, MIRR returns #VALUE! Error.

Applicability

Excel 2007, Excel 2010, Excel 2013, Excel 2016

Example

MIRR Function
advanced_excel_financial_functions.htm
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