If you need to calculate the internal rate of return for a series of mixed cash flows, you can use the MIRR function.
- [Instructor] Investing money in projects…can be quite complicated.…In some cases, it's not as easy as…putting money into a project…and then taking the profits out.…In some cases, you might want to…take the money that comes out of a project…and reinvest it elsewhere.…In this movie, I will show you how to…evaluate a series of cash flows,…assuming that you borrowed money for the original investment…and can reinvest the proceeds from the project…in another investment.…My sample file is the Mixed IRR workbook,…and you can find it in the Chapter 2 folder…of the Exercise Files collection.…
To use the Mixed IRR function,…which is MIRR,…you need to know several bits of information.…The first is a series of cash flows…that occur at regular intervals.…So in cells B4 through B11,…you'll see that we have an initial cash flow,…which is $150,000.…That's a negative number,…because it's money flowing out of our account.…And then a series of incomes,…which are positive numbers.…To use MIRR, you have to have a negative number…in the first position and positive numbers in the remainder.…
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- Calculating the effect of interest rates and inflation
- Finding the arithmetic and geometric means of growth rates
- Calculating the future and present value of an investment
- Calculating loan payments for a fully amortized loan
- Calculating the effect of paying extra principal with each payment
- Finding the number of periods required to meet an investment goal
- Calculating net present value and internal rate of return
- Building a cash tracking worksheet
- Visualizing cash flows using a waterfall chart