How to Calculate MIRR with CALC 1

Using the Cash Flows Calculator

See the CALC 1 Cash Flows Calculator Video for a demonstration of calculating cash flows.

Case Study: Lisa's Business Expansion Project

Lisa is evaluating a business expansion project with the following cash flows:

Year	Cash Flow
0	-200,000
1	-50,000
2	100,000
3	200,000
4	300,000

Lisa's cost of capital is 8%, and she can reinvest positive cash flows at 12%. Let's calculate the MIRR:

Value	Keystrokes	Display	Description
	shift + C cf		Clears the financial list.
1	STO P/YR	1.00	Stores the payments per year.
-200000	CF0	-200,000.00	Stores the initial investment.
-50000	CFj	-50,000.00	Stores the Year 1 cash flow.
100000	CFj	100,000.00	Stores the Year 2 cash flow.
200000	CFj	200,000.00	Stores the Year 3 cash flow.
300000	CFj	300,000.00	Stores the Year 4 cash flow.
	shift Σf	350,000.00	Calculate the sum of the cash flows to verify the entries.
8	STO I/YR	8.00	Stores the finance rate.
12	STO R/YR	12.00	Stores the reinvestment rate.
	MIRR	27.43	Calculates the MIRR.

The History Detail

Calculates the Modified Internal Rate Of Return.
           8.00 : The Annual Rate.
          12.00 : The Reinvestment Rate.
           1.00 : The periods per year.
          27.43 : The modified internal rate of return.
List: listf
-200000.00
-50000.00
100000.00
200000.00
300000.00

The MIRR for Lisa's project is 27.43%, which is significantly higher than her cost of capital (8%). This suggests the project is potentially very profitable.

Tips for Cash Flow Analysis

• Always clear the financial list (list f) before starting a new calculation.
• Use the shift Σf function to verify your cash flow entries.
• For monthly cash flows, set P/YR to 12 to calculate annual rates.
• Use the List Manager to edit, reorder, add, or delete cash flow values.
• Tap the plot key to gain insights that might not be immediately apparent from the numbers alone.
• Remember that negative values represent outflows (investments) and positive values represent inflows (returns).
• Always check the History Detail to verify your inputs and results.

Further Reading

• Modified Internal Rate of Return (MIRR)