Modified Internal Rate of Return Calculator

✖The Present Value of the annuity is the value that determines the value of a series of future periodic payments at a given time.ⓘ Present Value [PV]			+10% -10%
✖Cash Outlay refers to the actual expenditure or payment of cash for a particular purpose, investment, or expense.ⓘ Cash Outlay [PV_O]			+10% -10%
✖The Number of Years is the total period for which the certificate of deposit is done.ⓘ Number of Years [t]			+10% -10%
✖Interest is the charge for the privilege of borrowing money, typically expressed as an annual percentage rate.ⓘ Interest [I]			+10% -10%

✖Modified Internal Rate of Return is a modified version of the Internal Rate of Return (IRR) that addresses some of the issues associated with IRR.ⓘ Modified Internal Rate of Return [MIRR]

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Formula

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Modified Internal Rate of Return

Formula

`"MIRR" = 3*(("PV"/"PV"_{"O"})^(1/"t")*(1+"I")-1)`

Example

`"3.371535"=3*(("15"/"975")^(1/"3.5")*(1+"6")-1)`

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Modified Internal Rate of Return Solution

STEP 0: Pre-Calculation Summary

Formula Used

Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1)
MIRR = 3*((PV/PV_O)^(1/t)*(1+I)-1)
This formula uses 5 Variables

Variables Used

Modified Internal Rate of Return - Modified Internal Rate of Return is a modified version of the Internal Rate of Return (IRR) that addresses some of the issues associated with IRR.
Present Value - The Present Value of the annuity is the value that determines the value of a series of future periodic payments at a given time.
Cash Outlay - Cash Outlay refers to the actual expenditure or payment of cash for a particular purpose, investment, or expense.
Number of Years - The Number of Years is the total period for which the certificate of deposit is done.
Interest - Interest is the charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

STEP 1: Convert Input(s) to Base Unit

Present Value: 15 --> No Conversion Required
Cash Outlay: 975 --> No Conversion Required
Number of Years: 3.5 --> No Conversion Required
Interest: 6 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

MIRR = 3*((PV/PV_O)^(1/t)*(1+I)-1) --> 3*((15/975)^(1/3.5)*(1+6)-1)

Evaluating ... ...

MIRR = 3.37153466067318

STEP 3: Convert Result to Output's Unit

3.37153466067318 --> No Conversion Required

FINAL ANSWER

3.37153466067318 ≈ 3.371535 <-- Modified Internal Rate of Return

(Calculation completed in 00.004 seconds)

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Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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Satyawati College (DU), New Delhi

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< 18 Capital Budgeting Calculators

Overall Cost of Capital

Go Overall Cost of Capital = (Market Value of the Firm’s Equity)/(Market Value of the Firm’s Equity+Market Value of the Firm’s Debt)*Required Rate of Return+(Market Value of the Firm’s Debt)/(Market Value of the Firm’s Equity+Market Value of the Firm’s Debt)*Cost of Debt*(1-Tax Rate)

Discounted Payback Period

Go Discounted Payback Period = ln(1/(1-((Initial Investment*Discount Rate)/Periodic Cash Flow)))/ln(1+Discount Rate)

Net Present Value (NPV) for even cash flow

Go Net Present Value (NPV) = Expected Cash Flow*((1-(1+Rate of Return)^-Number of Periods)/Rate of Return)-Initial Investment

Capital Asset Pricing Model

Go Expected Return on Investment = Risk Free Rate+Beta on Investment*(Expected Return on Market Portfolio-Risk Free Rate)

Double Declining Balance Method

Go Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value

Modified Internal Rate of Return

Go Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1)

Cost of Retained Earnings

Go Cost of Retained Earnings = (Dividend/Current Stock Price)+Growth Rate

After-Tax Cost of Debt

Go After Tax Cost of Debt = (Risk Free Rate+Credit Spread)*(1-Tax Rate)

Beginning Inventory

Go Beginning Inventory = Cost of Goods Sold-Purchases+Ending Inventory

Terminal Value using Perpetuity Method

Go Terminal Value = Free Cash Flow/(Discount Rate-Growth Rate)

Trade Discount

Go Trade Discount = multi(List Price,Trade Discount Rate)

Expected Monetary Value

Go Expected Monetary Value = multi(Probability,Impact)

Accounting Rate of Return

Go Accounting Rate of Return = (Average Annual Profit/Initial Investment)*100

Inventory Carrying Cost

Go Inventory Carrying Cost = (Total Carrying Cost/Total Inventory Value)*100

Certainty Equivalent Cashflow

Go Certainty Equivalent Cashflow = Expected Cash Flow/(1+Risk Premium)

Payback Period

Go Payback Period = Initial Investment/Cashflow per Period

Terminal Value using Exit Multiple Method

Go Terminal Value = EBITDA at Last Period*Exit Multiple

Cost of Debt

Go Cost of Debt = Interest Expense*(1-Tax Rate)

Modified Internal Rate of Return Formula

Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1)
MIRR = 3*((PV/PV_O)^(1/t)*(1+I)-1)

What is Modified Internal Rate of Return?

Modified internal rate of return (MIRR) is a similar technique to IRR. Technically, MIRR is the IRR for a project with an identical level of investment and NPV to that being considered but with a single terminal payment. A simple example will help explain matters.
In simpler terms, MIRR assumes that positive cash flows are reinvested at a specified rate, and negative cash flows are financed at a different rate. The result is a modified rate of return that provides a more realistic assessment of an investment's profitability.

How to Calculate Modified Internal Rate of Return?

Modified Internal Rate of Return calculator uses Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1) to calculate the Modified Internal Rate of Return, The Modified Internal Rate of Return formula is defined as a financial metric used to evaluate the profitability of an investment or project. Modified Internal Rate of Return is denoted by MIRR symbol.

How to calculate Modified Internal Rate of Return using this online calculator? To use this online calculator for Modified Internal Rate of Return, enter Present Value (PV), Cash Outlay (PV_O), Number of Years (t) & Interest (I) and hit the calculate button. Here is how the Modified Internal Rate of Return calculation can be explained with given input values -> 3.371535 = 3*((15/975)^(1/3.5)*(1+6)-1).

FAQ

What is Modified Internal Rate of Return?

The Modified Internal Rate of Return formula is defined as a financial metric used to evaluate the profitability of an investment or project and is represented as MIRR = 3*((PV/PV_O)^(1/t)*(1+I)-1) or Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1). The Present Value of the annuity is the value that determines the value of a series of future periodic payments at a given time, Cash Outlay refers to the actual expenditure or payment of cash for a particular purpose, investment, or expense, The Number of Years is the total period for which the certificate of deposit is done & Interest is the charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

How to calculate Modified Internal Rate of Return?

The Modified Internal Rate of Return formula is defined as a financial metric used to evaluate the profitability of an investment or project is calculated using Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1). To calculate Modified Internal Rate of Return, you need Present Value (PV), Cash Outlay (PV_O), Number of Years (t) & Interest (I). With our tool, you need to enter the respective value for Present Value, Cash Outlay, Number of Years & Interest and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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