Returns the modified internal rate of return for a series of periodic cash flows (payments and receipts).
MIRR(values(), finance_rate, reinvest_rate)
The MIRR function has these named arguments:
|
Part |
Description |
|
values() |
Array of cash flow values. The array must contain at least one negative value (a payment) and one positive value (a receipt). |
|
finance_rate |
Interest rate paid as the cost of financing. |
|
reinvest_rate |
Interest rate received on gains from cash reinvestment. |
The modified internal rate of return is the internal rate of return when payments and receipts are financed at different rates. The MIRR function takes into account both the cost of the investment (finance_rate) and the interest rate received on reinvestment of cash (reinvest_rate).
The arguments finance_rate and reinvest_rate are percentages expressed as decimal values. For example, 12 percent is expressed as 0.12.
The MIRR function uses the order of values within the array to interpret the order of payments and receipts. Be sure to enter your payment and receipt values in the correct sequence.
This example uses the MIRR function to return the modified internal rate of return for a series of cash flows contained in the array Values(). LoanAPR represents the financing interest, and InvAPR represents the interest rate received on reinvestment.
Static Values(5) As Double ' Set up array.= .1 ' Loan rate.= .12 ' Reinvestment rate.= "#0.00" ' Define money format.(0) = -70000 ' Business start-up costs.
' Positive cash flows reflecting income for four successive years.(1) = 22000 : Values(2) = 25000(3) = 28000 : Values(4) = 31000= MIRR(Values(), LoanAPR, InvAPR) ' Calculate internal rate.= "The modified internal rate of return for these five cash to "& _
"flows is"= Msg & Format(Abs(RetRate) * 100, Fmt) & "%."Msg ' Display internal return
' rate.