MIRR Calculator
Enter your cash flows and the finance and reinvestment rates to get the modified internal rate of return.
First value is the initial investment (negative). One value per period.
MIRR, the modified internal rate of return, fixes IRR's unrealistic assumption that cash flows are reinvested at the IRR itself. It compounds positive cash flows forward at a reinvestment rate and discounts negative ones back at a finance rate, then finds the single rate linking them over the project's life.
How to Use This Calculator
Enter your cash flows in order, separated by commas, with the first value the initial investment written as a negative number. Each value represents one period — typically one year. Then enter two rates: the finance rate, which is your cost of capital for the money invested, and the reinvestment rate, which is the return you can earn on cash the project throws off.
The calculator returns the MIRR as a percentage. Unlike IRR, MIRR always gives a single, sensible answer even when the cash flows change sign more than once.
How the Calculation Works
MIRR separates the two things IRR muddles together. Every positive cash flow is compounded forward to the end of the project at the reinvestment rate, and the results are summed into a single future value. Every negative cash flow is discounted back to the start at the finance rate, giving a single present value of what you put in.
MIRR is then the rate that grows that present value of outflows into that future value of inflows over n periods — the nth root of their ratio, minus one. It answers 'what steady annual return does this project actually deliver?'
MIRR = (FV of inflows ÷ |PV of outflows|)^(1/n) − 1
Worked Example
Take cash flows of −1,000, then 300, 400, 500 and 600 over four years, with a 10% finance rate and a 12% reinvestment rate. The only outflow is the initial 1,000, so its present value is 1,000.
Compounding the inflows to year 4 at 12%: 300×1.12³ + 400×1.12² + 500×1.12 + 600 = 421.48 + 501.76 + 560 + 600 = 2,083.24. The MIRR is (2,083.24 ÷ 1,000)^(1/4) − 1 = 20.14%.
What the Result Means
MIRR is a more realistic profitability measure than IRR because it uses rates you could actually achieve rather than assuming reinvestment at the project's own return. A MIRR above your cost of capital signals a project worth pursuing.
Because it always produces one value, MIRR is especially useful for comparing projects with irregular cash flows, where IRR can give multiple or misleading answers.
Assumptions and Limitations
- Cash flows are assumed to occur at even, end-of-period intervals
- The first cash flow should be the initial investment as a negative number
- Needs at least one negative and one positive cash flow
- The result depends on the finance and reinvestment rates you choose
Who Uses an MIRR Calculator
Finance students, analysts, and investors use this to find the modified internal rate of return on a series of cash flows. MIRR corrects the unrealistic reinvestment assumption built into ordinary IRR, so it gives a truer picture when comparing projects or investments. Use it for capital-budgeting decisions, coursework, or any analysis where you want a return figure that reflects realistic reinvestment and financing rates.
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Open calculator →Frequently Asked Questions
What is the difference between MIRR and IRR?
IRR assumes every cash flow is reinvested at the IRR itself, which is often unrealistic. MIRR uses a separate, realistic reinvestment rate and a finance rate, so it gives a truer and always-single measure of return.
Why is MIRR usually lower than IRR?
Because the reinvestment rate used in MIRR is normally lower than a high IRR. IRR flatters a project by assuming its cash flows keep earning the same high rate; MIRR corrects that optimism.
What rates should I use for MIRR?
Use your cost of capital as the finance rate for the money invested, and a realistic rate you could actually earn on returned cash as the reinvestment rate — often close to your cost of capital.
How do I enter cash flows?
List them in order separated by commas, with the initial investment first as a negative number. Each value is one period, usually a year, including any zero-cash-flow periods.
When should I use MIRR instead of IRR?
Use MIRR when cash flows change sign more than once, when comparing projects of different shapes, or whenever IRR's reinvestment assumption would overstate the real return.
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