Standard IRR implicitly assumes every interim cash flow gets reinvested at the IRR itself — often an unrealistically high rate. MIRR fixes that by using an explicit, separate reinvestment rate.
How it works
Every positive cash flow is compounded forward to the final year at the stated reinvestment rate, summed into one future value; the geometric-mean rate that grows the initial investment to that future value over the number of periods is the MIRR.
What this does not include
This does not include a separate finance rate for discounting interim negative cash flows (some MIRR variants use one) — this calculator handles the common case of a single upfront investment followed only by positive inflows.
How to use this calculator
- Enter the initial investment, yearly cash flows, and a reinvestment rate.
Frequently asked questions
Why is MIRR usually lower than IRR for the same cash flows?
Because IRR implicitly assumes reinvestment at its own (often high) rate, while MIRR uses a more conservative, realistic reinvestment rate — the gap between the two grows as the true reinvestment opportunity gets further from the calculated IRR.
Does MIRR solve IRR’s multiple-solutions problem?
Yes — because MIRR is solved with a direct closed-form formula rather than searching for where NPV crosses zero, it always produces exactly one unique answer, unlike IRR for unusual cash flow patterns.
Which one should I actually use for decision-making?
Many finance practitioners consider MIRR the more realistic figure specifically because of its reinvestment assumption, though IRR remains far more commonly cited and quoted in practice.
