Calculate MIRR with separate finance and reinvestment rates. Compare against standard IRR, see NPV, cash flow schedule, and reinvestment rate sensitivity.
The Modified Internal Rate of Return (MIRR) solves the two biggest problems with standard IRR: the unrealistic reinvestment rate assumption and the possibility of multiple IRRs when cash flows change sign more than once.
Standard IRR assumes all positive cash flows are reinvested at the IRR itself — a rate that's often unrealistically high. MIRR uses two realistic rates instead: a finance rate for discounting negative cash flows (your cost of capital) and a reinvestment rate for compounding positive cash flows (your actual reinvestment opportunity).
The formula computes: (1) PV of all negative cash flows discounted at the finance rate, (2) FV of all positive cash flows compounded at the reinvestment rate, then (3) MIRR = (FV/PV)^(1/n) − 1. This always produces a single, unique answer. MIRR is typically lower than IRR for high-return projects, revealing how much of IRR's optimism came from the reinvestment assumption.
Use the preset examples to load common values instantly, or type in custom inputs to see results in real time. The output updates as you type, making it practical to compare different scenarios without resetting the page.
Use this when standard IRR gives an unrealistic reinvestment assumption or more than one solution. MIRR applies separate finance and reinvestment rates, making project comparisons cleaner and easier to defend.
PV_neg = |Σ(negative CFs / (1 + finance_rate)^t)| FV_pos = Σ(positive CFs × (1 + reinvest_rate)^(n−t)) MIRR = (FV_pos / PV_neg)^(1/n) − 1
Result: MIRR = 8.92% vs IRR = 12.8%
The standard IRR of 12.8% assumes reinvestment at 12.8%. MIRR at 8.92% uses realistic rates: 6% finance and 4% reinvestment. The 3.9pp gap shows how much IRR overstated the true return.
MIRR separates the cost of funding negative cash flows from the return earned on positive cash flows. That makes it more realistic than standard IRR when project cash flows are irregular or when the reinvestment assumption matters.
Choose a finance rate that matches your borrowing cost or hurdle rate, and a reinvestment rate that reflects where interim cash can actually be placed. The gap between MIRR and IRR usually widens when IRR is high or cash flows are uneven.
If MIRR is above the finance rate, the project adds value on those assumptions. If it is below, the cash flows do not compensate for the funding cost.
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This calculator parses the entered comma-separated cash-flow stream, discounts every negative cash flow to present value at the finance rate, compounds every positive cash flow to the terminal period at the reinvestment rate, and then solves MIRR from the ratio of those two values. It also computes a standard IRR with a Newton-Raphson iteration, NPV at the finance rate, and a reinvestment-rate sensitivity table using the same cash-flow stream.
The result depends directly on the finance and reinvestment assumptions entered by the user. It is a return-comparison worksheet, not a forecast of what a project will actually earn, and nonstandard cash-flow timing within periods is not modeled.
Because IRR assumes reinvestment at the (high) IRR, while MIRR uses a more conservative reinvestment rate. The gap widens as IRR gets higher.
When the reinvestment rate and finance rate both equal the IRR. This is the special (unrealistic) case that standard IRR assumes.
Your cost of capital: WACC for corporate projects, mortgage rate for real estate, or the rate you'd pay to fund the investment. Understanding this concept helps you apply the calculator correctly and interpret the results with confidence.
Use the return you can realistically earn on interim cash flows, not the headline target return of the project. A conservative reinvestment assumption is usually more informative than an optimistic one.
Yes. When cash flows change sign more than once, IRR may have multiple solutions. MIRR always produces a single, unique answer.
NPV is theoretically cleaner for ranking projects. MIRR is useful when stakeholders prefer a percentage return metric that doesn't have IRR's flaws.