What is the key difference between IRR and MIRR?

IRR assumes reinvestment of positive cash flows at the IRR rate. MIRR uses a specified, typically lower reinvestment rate such as WACC, making it more realistic and always yielding a unique answer.

When should I use MIRR over IRR?

When the project IRR is very high, when cash flows change sign more than once, or when comparing mutually exclusive projects with different scales or timing.

What rates should I use for MIRR?

Finance rate: WACC or borrowing cost for negative cash flows. Reinvestment rate: WACC or expected safe reinvestment return. Using WACC for both is common and theoretically consistent.

Modified IRR (MIRR) Calculator

Calculate MIRR using explicit reinvestment and finance rates. MIRR = (FV of positive cash flows at reinvestment rate / PV of negative cash flows at finance rate)^(1/n) - 1.

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Frequently Asked Questions

What is the key difference between IRR and MIRR?

When should I use MIRR over IRR?

What rates should I use for MIRR?