IRR and MIRR calculator

The IRR is the rate that makes the net present value zero. MIRR instead compounds the inflows forward at the reinvestment rate and discounts the outflows at the finance rate, which gives a single, unambiguous answer.

Σ CF_t / (1 + IRR)^t = 0
MIRR = (FV of inflows at reinvestment rate / −PV of outflows at finance rate)^(1/(n − 1)) − 1

The IRR is found by scanning rates from −99.99% to 1,000,000% and refining every sign change of the NPV to full precision, so all IRRs are reported when the cash flows change sign more than once.

Assumptions and limits

• Periods are equally spaced, with the first value at period 0.
• Two IRRs closer together than about one percentage point may be reported as one.
• IRR assumes interim cash flows are reinvested at the IRR itself; MIRR replaces that assumption with the rates you enter.
• An educational calculation, not financial, tax, legal or investment advice.

Worked example

Microsoft’s IRR example: −70,000 then 12,000, 15,000, 18,000, 21,000 and 26,000 give an IRR of 8.66%; without the last year, −2.12%. Its MIRR example: −120,000, 39,000, 30,000, 21,000, 37,000, 46,000 at a 10% finance rate and 12% reinvestment rate give 12.61%.

References

• Microsoft Excel: IRR function
• Microsoft Excel: MIRR function