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EXCEL MIRR FUNCTION
Excel MIRR Function Introduction
The Excel MIRR function calculates the Modified Internal Rate of Return for a given collection of monthly free cash flow.
Description of Excel MIRR Function
Syntax :
=MIRR( values, finance_rate, reinvest_rate )
Parameters :
- Values – An array of values (or a reference to a range of cells holding values) that reflect a sequence of cash flows (investment and net income values) that occur on a regular basis. At least one negative value (indicating outgoing payment) and one positive value must be included (representing income).
- Finance rate – The interest rate paid on funds utilised in cash flows.
- Reinvest rate – The interest rate paid on cash flows reinvested.
Step By Step Guide of MIRR Function
Example :
Cells B2-B7 show the cashflow for an investment. Cell B2 shows the initial investment of $100, while cells B3-B7 represent the net income over five periods. The MIRR function in cell C2 calculates the Modified Internal Rate of Return after four years, whereas the function in cell C4 calculates the Modified Internal Rate of Return after five years.
Key Points
- #DIV/0! – Occurs if the supplied values array lacks at least one negative and one positive value.
- #VALUE! – This error occurs if any of the supplied parameters is not a number.
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