Financial Toolbox

mirr

Modified internal rate of return

Syntax

• Return = mirr(CashFlow, FinRate, Reinvest)
  

Arguments

CashFlow	Vector of cash flows. The first entry is the initial investment.
FinRate	Finance rate for negative cash flow values. Enter as decimal fraction.
Reinvest	Reinvestment rate for positive cash flow values, as a decimal fraction.

Description

Return = mirr(CashFlow, FinRate, Reinvest) calculates the modified internal rate of return for a series of periodic cash flows. This function calculates only positive rates of return; for negative rates of return, Return = 0.

Examples

This cash flow represents the yearly income from an initial investment of $100,000. The finance rate is 9% and the reinvestment rate is 12%.

Year 1	$20,000
Year 2	($10,000)
Year 3	$30,000
Year 4	$38,000
Year 5	$50,000

To calculate the modified internal rate of return on the investment

• Return = mirr([-100000 20000 -10000 30000 38000 50000], 0.09,... 
  0.12)
  

returns

• Return =
           0.0832 (8.32%)
  

See Also
annurate, effrr, irr, nomrr, pvvar, xirr

References

Brealey and Myers, Principles of Corporate Finance, Chapter 5

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