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Modified Internal Rate of Return Formula

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Modified Internal Rate of Return is a modified version of the Internal Rate of Return (IRR) that addresses some of the issues associated with IRR. Check FAQs

MIRR = 3 \cdot ({(\frac{PV}{PV O})}^{\frac{1}{t}} \cdot (1 + I) - 1)

MIRR - Modified Internal Rate of Return?PV - Present Value?PV_O - Cash Outlay?t - Number of Years?I - Interest?

Modified Internal Rate of Return Example

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Here is how the Modified Internal Rate of Return equation looks like with Values.

Here is how the Modified Internal Rate of Return equation looks like with Units.

Here is how the Modified Internal Rate of Return equation looks like.

3.3715 = 3 \cdot ({(\frac{15}{975})}^{\frac{1}{3.5}} \cdot (1 + 6) - 1)

3.3715 = 3 \cdot ({(\frac{15}{975})}^{\frac{1}{3.5}} \cdot (1 + 6) - 1)

3.3715 = 3 \cdot ({(\frac{15}{975})}^{\frac{1}{3.5}} \cdot (1 + 6) - 1)

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Capital Budgeting » fx Modified Internal Rate of Return

Modified Internal Rate of Return Solution

Follow our step by step solution on how to calculate Modified Internal Rate of Return?

FIRST Step Consider the formula

MIRR = 3 \cdot ({(\frac{PV}{PV O})}^{\frac{1}{t}} \cdot (1 + I) - 1)

Next Step Substitute values of Variables

∴

MIRR = 3 \cdot ({(\frac{15}{975})}^{\frac{1}{3.5}} \cdot (1 + 6) - 1)

Next Step Prepare to Evaluate

∴

MIRR = 3 \cdot ({(\frac{15}{975})}^{\frac{1}{3.5}} \cdot (1 + 6) - 1)

Next Step Evaluate

∴

MIRR = 3.37153466067318

LAST Step Rounding Answer

∴

MIRR = 3.3715

Modified Internal Rate of Return Formula Elements

Variables

Modified Internal Rate of Return

Modified Internal Rate of Return is a modified version of the Internal Rate of Return (IRR) that addresses some of the issues associated with IRR.

Symbol: MIRR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Modified Internal Rate of Return

Present Value

The Present Value of the annuity is the value that determines the value of a series of future periodic payments at a given time.

Symbol: PV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Present Value

Cash Outlay

Cash Outlay refers to the actual expenditure or payment of cash for a particular purpose, investment, or expense.

Symbol: PV_O

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Cash Outlay

Number of Years

The Number of Years is the total period for which the certificate of deposit is done.

Symbol: t

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Number of Years

Interest

Interest is the charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Symbol: I

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Interest

Other formulas in Capital Budgeting category

Go Payback Period

PBP = \frac{Initial Invt}{C f}

Go Cost of Retained Earnings

C RE = (\frac{D}{P c}) + g

Go Cost of Debt

R d = Int.E \cdot (1 - T r)

Go After-Tax Cost of Debt

ATCD = (R f + CS P) \cdot (1 - T r)

How to Evaluate Modified Internal Rate of Return?

Modified Internal Rate of Return evaluator uses Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1) to evaluate the Modified Internal Rate of Return, The Modified Internal Rate of Return formula is defined as a financial metric used to evaluate the profitability of an investment or project. Modified Internal Rate of Return is denoted by MIRR symbol.

How to evaluate Modified Internal Rate of Return using this online evaluator? To use this online evaluator for Modified Internal Rate of Return, enter Present Value (PV), Cash Outlay (PV_O), Number of Years (t) & Interest (I) and hit the calculate button.

FAQs on Modified Internal Rate of Return

What is the formula to find Modified Internal Rate of Return?

The formula of Modified Internal Rate of Return is expressed as Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1). Here is an example- 3.371535 = 3*((15/975)^(1/3.5)*(1+6)-1).

How to calculate Modified Internal Rate of Return?

With Present Value (PV), Cash Outlay (PV_O), Number of Years (t) & Interest (I) we can find Modified Internal Rate of Return using the formula - Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1).

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Modified Internal Rate of Return Formula

Modified Internal Rate of Return Example

Modified Internal Rate of Return Solution

Modified Internal Rate of Return Formula Elements

Other formulas in Capital Budgeting category

How to Evaluate Modified Internal Rate of Return?

FAQs on Modified Internal Rate of Return

Variable Name