MIRR Calculator — Modified Internal Rate of Return
Who this is for: For corporate finance students covering the MIRR chapter — and for anyone who suspects a 40% IRR is mostly reinvestment fantasy and wants the defensible number for a memo.
Not the right tool for: Splitting finance and reinvestment into two different rates — this page applies one rate to both roles · Deciding accept/reject on its own — MIRR is a corrected return metric; NPV still settles value
Modified internal rate of return: reinvests inflows at a rate you choose instead of the IRR — the conservative fix for IRR's optimism.
Quick answer: MIRR = (FV of positive flows at the reinvestment rate ÷ |PV of negative flows at the finance rate|)^(1/n) − 1. On −$1,000, $500, $600, $700 at 8% for both, MIRR is 24.53% versus a 33.87% IRR — the honest version, because mid-project cash can't realistically be reinvested at 33.87%.
| Period | Cash flow | Discounted | Cumulative (discounted) |
|---|---|---|---|
| 0 (today) | -$1,000.00 | -$1,000.00 | -$1,000.00 |
| 1 | $500.00 | $462.96 | -$537.04 |
| 2 | $600.00 | $514.40 | -$22.63 |
| 3 | $700.00 | $555.68 | $533.05 |
| Formula | MIRR = (FV₊/|PV₋|)^(1/n) − 1 |
|---|---|
| Worked example | −$1,000; $500, $600, $700 @ 8% both rates → MIRR 24.53% (IRR: 33.87%) |
| Rates used | Page discount rate applied as both finance and reinvestment rate |
| Compiled | October 2026 |
What MIRR changes about IRR
MIRR keeps IRR's idea — one compound rate describing the stream — but fixes its weakest assumption. All negative flows are discounted to day zero at the finance rate (what it costs you to fund the gaps), all positive flows are compounded to the end at the reinvestment rate (what you can actually earn on the proceeds), and MIRR is the single rate connecting the two: MIRR = (FV of inflows / |PV of outflows|)^(1/n) − 1. Example: −$1,000, then $500, $600, $700, with everything at 8%: the inflows compound to $1,931.20, so MIRR = 24.53% — below the 33.87% IRR, because you can't actually reinvest $500 mid-project at 33.87%. MIRR is also unique: no matter how many times the stream changes sign, there is exactly one MIRR, which kills the multiple-IRR problem.
Common uses
- De-flating a headline IRR before it goes in a memo or case write-up
- Capital-budgeting homework that specifies finance and reinvestment rates
- Comparing projects with different cash flow timing on equal footing
- Resolving the multiple-IRR ambiguity on sign-flipping streams
Where these numbers come from
All results are computed in your browser from the standard closed-form formulas (and a numerical root-finder where no closed form exists — rates, IRR, YTM). Formulas follow the ordinary-annuity (END) convention used by the BA II Plus and HP 12C. Educational reference only — not investment, tax, or accounting advice.