Microsoft Office Tutorials and References
In Depth Information
Figure 6.22
function returns the
modified duration of
a security with a par
value assumed of
The result of cell
MIR MIRR returns a modified internal rate of return for several periodic cash flows.
Consider the following example in Figure 6.23. You purchased a restaurant with an initial
borrowing of $230,000 at 8.1%; your returns for the following five years were respectively $35,000,
$36,000, $57,000, $76,000, and $87,000. You reinvest the profits over the five years, earning an
annual return of 12.8%. Your modified rate of return after 5 years is 8.98%. (The difference between
this function and IRR is mainly that MIRR takes into account finance and reinvestment interest.)
The array of numbers or reference to cells represented by payments
(negative values), and income (positive values).
The interest rate paid on the money used in the cash flows.
The interest rate received on the cash flows as they are reinvested.
MIRR can be calculated as:
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