Excel MIRR function

tadXL v2.5

104 new financial functions for Excel 2007, 2010 & 2013

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

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

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Find benefit to cost ratio of an investment

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Find discounted payback period of an investment

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Find equivalent annual annuity of an investment

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Find equivalent annual cost of an investment

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Find internal rate of return of an investment

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Find modified internal rate of return of an investment

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Find net future value of an investment

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Find net present value of an investment

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Find profitability index of an investment

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Find simple payback period of an investment

From The Author

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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.

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As stated earlier the FTWE 100 index is the result of financial calculations that are made possible using the financial software products that we offer for free. All of our software tools may be downloaded for personal and corporate use, however the complete versions of these software products cost a nominal price that allows for more complex options when finding the FTWE 100 index. For more details on downloading and using these software products, follow the read more link to find your return on investment - ROI […]

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.

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You may go ahead and download tadXL v2.5 from the following download card. There are 104 financial functions in this add-in that allow finding return on investment, time value of money calculations, interest rates, and misc.

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Finding MIRR in Excel

Up until Excel 2013, there was only one native financial functions in Excel to find the MIRR - modified internal rate of return yet it was limited in its functionality In spring of 2012, tadXL add-in was released on the market that offered its own set of financial functions for the Excel 2007, 2010 and 2013. tadXL contains a number of MIRR functions that are used in finding modified IRR depending how much of information is available about the investment. The trivial of these MIRR calculations in tadXL allowed for annuity payments with start or end of period cash flows. The more complex set of MIRR calculations in later versions of tadXL allowed for use of compounding frequencies of interest, the selection of lengths for the payment periods, a number of discounting conventions. Then the different variants of tadMIRR function permitted use of schedule of transaction dates, schedule of discount rates, and a combination of both rates and dates schedules. That said, none of these options were available in Excel up to Excel 2013, if Microsoft were to include its own set of MIRR and other financial functions in upcoming Excel 2015 or 2016 that mimic the functions in tadXL then that would be outright a copyright violation. The tadXL functions were developed over a period of six years and the research work carried out by the author and none of these functions or formulas to perform such calculations were hiterto known in finance world. I suppose rights do not matter over profits even those who run large software companies claiming they lose out on millions of dollars to piracy themselves do not regard highly of others copyrighted work.

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 )

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