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MIRR=(sqrt(FVCF/I)^n)-1 MIRR - modified internal rate of return FVCF - future value of a cash flow I - Investment n - number of periods of the cash flow

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MIRR=(sqrt(FVCF/I)^n)-1 MIRR - modified internal rate of return FVCF - future value of a cash flow I - Investment n - number of periods of the cash flow

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The MIRR function returns the modified internal rate of return for a series of cash flows. The internal rate of return is calculated by using both the cost of the investment and the interest received by reinvesting the cash. The cash flows must occur at regular intervals, but do not have to be the same amounts for each interval.

MIRR(range,finance_rate,reinvestment_rate)

range = range of cells that represent the series of cash flows

finance_rate = interest rate that you pay on the cash flow amounts

reinvestment_rate = interest rate that you receive on the cash flow amounts as they are reinvested

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A capital budget includes a payback period, the net present value, and the internal rate of return. It may also include a modified internal rate of return.

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Money deposited in an interest bearing account has a rate of return. the institution will take that money and reinvest it so they can make money off of it as well.

This rate of return on the internal investment is the internal rate of return, which is usually higher than that paid to the original investor.

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Internal Rate of Return

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