MIRR Calculator
The modified internal rate of return (MIRR) measures a project's annualised return using realistic assumptions: positive cash flows are reinvested at a reinvestment rate, and negative cash flows are financed at a finance rate. This avoids the internal rate of return's flaw of assuming every interim flow earns the IRR itself. This calculator takes an initial outlay (year 0) plus up to four annual cash flows, the finance rate, and the reinvestment rate, and returns the MIRR. Enter outflows as negative numbers and inflows as positive numbers.
MIRR formula
FV(inflows) = sum of positive CF_t * (1 + reinvest)^(n - t)
PV(outflows) = sum of negative CF_t / (1 + finance)^t
MIRR = (FV(inflows) / -PV(outflows))^(1/n) - 1
n = number of periods (years here)
The reinvestment rate compounds inflows forward to the final period; the finance rate discounts outflows back to today. The single growth rate that links them is the MIRR.
MIRR context
- MIRR corrects IRR's unrealistic reinvestment-at-IRR assumption.
- It always returns a single value, unlike IRR with multiple sign changes.
- The finance rate is typically the cost of capital or borrowing rate.
- The reinvestment rate is the realistic return on received cash.
- Set unused later years to zero to model a shorter project.
MIRR: frequently asked questions
What is the modified internal rate of return?
The modified internal rate of return (MIRR) is a profitability measure that improves on the internal rate of return (IRR). It assumes positive cash flows are reinvested at a realistic reinvestment rate, and negative cash flows are financed at a finance rate, rather than IRR's unrealistic assumption that all flows compound at the IRR itself.
How is MIRR calculated?
MIRR equals the nth root of the future value of positive cash flows (compounded at the reinvestment rate) divided by the present value of negative cash flows (discounted at the finance rate), minus 1, where n is the number of periods.
Why use MIRR instead of IRR?
IRR can overstate returns because it assumes interim cash flows earn the IRR. MIRR uses separate, more realistic rates for reinvestment and financing, and it produces a single value even for projects with multiple sign changes, which can give IRR several solutions.
What rates should I use?
The finance rate is your cost of capital or borrowing cost, used to discount outflows. The reinvestment rate is the return you expect on cash flows received, often your cost of capital or a conservative market rate. Both are editable so you can match your situation.
What if there are no positive or no negative cash flows?
MIRR requires at least one negative (outflow) and one positive (inflow) cash flow. If either is missing, the ratio is undefined and the calculator shows n/a. Enter your initial investment as a negative-impact outlay and your returns as positive inflows.
Official sources
- U.S. Securities and Exchange Commission: Investor.gov.
- U.S. Securities and Exchange Commission: SEC.gov.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.