Formula generator for MIRR function
The MIRR function calculates the modified internal rate of return on an investment. It takes into account a series of periodic cash flows and the difference between the interest rate paid on financing versus the return received on reinvested income. The function returns the modified internal rate of return as a percentage.
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How to generate an MIRR formula using AI.
To obtain information on the ARRAY_CONSTRAIN formula, you could ask the AI chatbot the following question: “To obtain the MIRR formula for your data, you could ask the AI chatbot the following question: "What is the formula for calculating the Modified Internal Rate of Return (MIRR) in Excel?"”
MIRR formula syntax
The MIRR function in Excel calculates the modified internal rate of return for a series of cash flows. Its syntax is as follows: MIRR(values, finance_rate, reinvestment_rate) - values: This is a required parameter that represents the range of cells containing the cash flows, including both positive and negative values. - finance_rate: This is the required parameter that represents the interest rate paid on the financing used to fund the cash flows. - reinvestment_rate: This is the required parameter that represents the interest rate earned on the reinvestment of cash flows. The MIRR function returns the modified internal rate of return, which is the rate at which the net present value of the cash inflows equals the net present value of the cash outflows, considering both the financing and reinvestment rates.
Use Cases & Examples
In these use cases, we use the MIRR formula to calculate the modified internal rate of return for a series of cash flows. The MIRR function takes into account both the initial investment and the reinvestment rate, providing a more accurate measure of return.
Investment Analysis
Description
Calculates the modified internal rate of return on an investment based on a series of periodic cash flows and the difference between the interest rate paid on financing versus the return received on reinvested income.
Result
MIRR(cashflow_amounts, financing_rate, reinvestment_return_rate)
Loan Comparison
Description
Compares the total cost of two different loans by calculating the modified internal rate of return for each loan based on the cash flows and interest rates.
Result
MIRR(cashflow_amounts, financing_rate, reinvestment_return_rate)
Project Evaluation
Description
Evaluates the profitability of a project by calculating the modified internal rate of return based on the cash flows and the financing and reinvestment rates.
Result
MIRR(cashflow_amounts, financing_rate, reinvestment_return_rate)
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Provide Clear Context
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Include Key Details
Include important details such as column names, data ranges, and specific criteria that need to be considered in the formula. The more precise and specific you are, the better the AI can generate an appropriate formula.
Use Examples
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FAQ
Frequently Asked Questions
- The MIRR function in Excel calculates the modified internal rate of return for a series of cash flows, taking into account both the cost of investment and the interest rate earned on reinvested cash flows.
- To use the MIRR function in Excel, you need to provide the range of cash flows, the cost of investment, and the interest rate earned on reinvested cash flows as arguments. The syntax is: MIRR(cash_flows, cost_of_investment, reinvestment_rate).
- The main difference between MIRR and IRR in Excel is that MIRR takes into account the reinvestment rate of cash flows, while IRR assumes that all cash flows are reinvested at the same rate as the initial investment.
- Yes, the MIRR function in Excel can return negative values if the cost of investment is higher than the interest rate earned on reinvested cash flows. This indicates that the investment is not profitable.
- One limitation of the MIRR function in Excel is that it assumes cash flows occur at regular intervals. If the cash flows are irregular, you may need to use other functions or techniques to calculate the modified internal rate of return.