For that reason, he cannot take IRR as his annual yield. If we use MIRR and reinvest dividends at (still pretty high) 10% p. a., value of MIRR will be 12%.

The MIRR improves on the standard internal rate of return (IRR) value by adjusting for differences in the assumed reinvestment rates of initial cash outlays and subsequent cash inflows.

Excel and Google Sheets have three functions to calculate the internal rate of return: IRR, XIRR, and MIRR. Learn how these functions can calculate investment returns.

MIRR is just like a net present value calculation. You need to choose discount rates, ... IRR is a discount rate used to make the NPV of an investment equal to zero.

When calculating the IRR or MIRR of monthly cash flows, the results must be multiplied by 12 to produce an annual yield; however, the XIRR function automatically produces an annual result that does ...

This would be the reinvestment rate, and the modified IRR spreadsheet function, or MIRR, would calculate a cash flow IRR using that rate as cash flows are deposited in the bank.

However, IRR can sometimes be overly-optimistic and for that reason, some traders choose to use the modified internal rate of return (MIRR) instead. A popular way that IRR is used in capital budgeting ...

MIRR resolves an inherent problem of the IRR calculation as it assumes that all cashflows are reinvested at the reinvestment rate, which is more accurate than cashflows being reinvested at the IRR.