The modified internal rate of return (MIRR) formula adds up the negative cash flows after discounting them to time zero using the external cost of capital, adds up the positive cash flows including the proceeds of reinvestment at the external reinvestment rate to the final period, and then works out what rate of return would cause the magnitude of the discounted negative cash flows at time zero to be equivalent to the future value of the positive cash flows at the final time period.

Unit of Measure:

N/A

Source:

ICP

Sector:

Commercial, Residential, Multifamily

Bedes version: