104 new financial functions for Excel 2007, 2010 & 2013

104 new financial functions for Excel 2007, 2010 and 2013.

10 new financial functions for Excel 2007, 2010 and 2013.

Find benefit to cost ratio of an investment

Find discounted payback period of an investment

Find equivalent annual annuity of an investment

Find equivalent annual cost of an investment

Find internal rate of return of an investment

Find modified internal rate of return of an investment

Find net future value of an investment

Find net present value of an investment

Find profitability index of an investment

Find simple payback period of an investment

From The Author

Welcome to FTWE 100

FTWE 100 is the financial treasure web index that offers you a host of financial products and services making it possible to analyze investments. The FTWE 100 index allows an analyst to determine the investor's return on investment - ROI using the financial software tools that we offer. FTWE 100 enables financial analysts like you to make informed decisions on investments thus ensuring the profitability of your company or personal gains. The FTWE 100 index is an indicator of sound invesment based upon financial analysis resulting from the use of our software tools. Keep us bookmarked in your web browser as the tools that we offer are not found elsewhere and are one of a kind in financial industry.

MIRR - modified IRR

MIRR - is an acronym for modified internal rate of return and it is one of the many tools that an analyst makes use of to find an investor's return on investment. An investment is only viable when it generates enough money to pay off the financing and to leave enough money to keep as profits. MIRR is a modified IRR and is used when an internal rate of return may not be found or there exist multiple IRR values. There are no IRR formulas yet we can always calculate a modified IRR given that there is at least one negative amount and one positive amount. The MIRR is found by finding the geometric average of net future value of benefits and net present value of costs. The net future value is found as a sum of compounded benefits whereas net present value is found as a sum of discounted costs.

Here I present you with an MIRR document as a Word file that will examine the Modified IRR in quite detail. It starts with defining the MIRR and the reason why we select MIRR as opposed to IRR. Then it presents the MIRR formula and uses it in an example calculation of modified internal rate of return. References are given for more detailed examination of MIRR calculation when the cash flows are accompanied by a schedule of dates. This is referred to as an XMIRR calculation named after an Excel function that finds the modified internal rate of return. The guide also looks at other aspects of MIRR calculation that relate to use of compounding frequencies of interest and the possibility of cash flows other than annual such as half-yearly, quarterly, monthly, weekly, daily or even biennial.

Finding MIRR in Excel

Using tadXL functions such as tadMIRR, tadMIRRSchedule, tadXMIRR and tadXMIRRSchedule finding modified internal rate of return in Excel 2007, 2010 and 2013 becomes really easy. Let us now briefly look at each of these three financial functions in tadXL to find MIRR using Excel:

=tadMIRR( finance_rate, reinvestment_rate, cash_flows, type, compounding, period, distribution )
=tadMIRRSchedule( rates, cash_flows, type, compounding, period, distribution )
=tadXMIRR( finance_rate, reinvestment_rate, cash_flows, dates, type, compounding, period, distribution )
=tadMIRRSchedule( rates, cash_flows, dates, type, compounding, period, distribution )