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#1
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Proper use of the MIRR (and IRR)
I want to provide a MIRR and an IRR analysis for the implementation of
proposed systems. As such I have 5 years of expenses for the analysis period and 5 years of revenue. All of these values are from the year-end. How do I setup the IRR and MIRR parameters. The function prototypes (and the Excel help) slightly confuses me concerning the values parameter: MIRR(values,finance_rate,reinvest_rate) IRR(values,guess) Thanks in advance for your adivce, Rick |
#2
Posted to microsoft.public.excel.worksheet.functions
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Proper use of the MIRR (and IRR)
IRR(values,guess)
values are a range of values ie B2:B6, where B2=initial cash outflow/inflow (t0) B3=cashflow at theend of t1... and the guess is a seed value which is optional MIRR MIRR(values,finance_rate,reinvest_rate) Values are the same as IRR Finance_rate is the interest rate you pay on the money used in the cash flows. Reinvest_rate is the interest rate you receive on the cash flows as you reinvest them. eg: IRR(B2:B6) MIRR(B2:B6,.1,.05) -- Hope this helps Martin Fishlock, Bangkok, Thailand Please do not forget to rate this reply. "nostabo" wrote: I want to provide a MIRR and an IRR analysis for the implementation of proposed systems. As such I have 5 years of expenses for the analysis period and 5 years of revenue. All of these values are from the year-end. How do I setup the IRR and MIRR parameters. The function prototypes (and the Excel help) slightly confuses me concerning the values parameter: MIRR(values,finance_rate,reinvest_rate) IRR(values,guess) Thanks in advance for your adivce, Rick |
#3
Posted to microsoft.public.excel.worksheet.functions
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Proper use of the MIRR (and IRR)
Thanks Martin,
But what really has me confused is how to list the values. If I have outflows and inflows for 5 years, do I list the outflows first or alternate them by year like: (Year 1 outflow, Year 1 inflow, Year 2 outflow, Year 2 inflow, Year 3 outflow, Year 3 inflow, Year 4 outflow, Year 4 inflow, Year 5 outflow, Year 5 inflow) ....and if there is a year or two with a zero outflow and/or inflow should they be listed as 0 in the range (array), or simply left out. Rick "Martin Fishlock" wrote in message ... IRR(values,guess) values are a range of values ie B2:B6, where B2=initial cash outflow/inflow (t0) B3=cashflow at theend of t1... and the guess is a seed value which is optional MIRR MIRR(values,finance_rate,reinvest_rate) Values are the same as IRR Finance_rate is the interest rate you pay on the money used in the cash flows. Reinvest_rate is the interest rate you receive on the cash flows as you reinvest them. eg: IRR(B2:B6) MIRR(B2:B6,.1,.05) -- Hope this helps Martin Fishlock, Bangkok, Thailand Please do not forget to rate this reply. "nostabo" wrote: I want to provide a MIRR and an IRR analysis for the implementation of proposed systems. As such I have 5 years of expenses for the analysis period and 5 years of revenue. All of these values are from the year-end. How do I setup the IRR and MIRR parameters. The function prototypes (and the Excel help) slightly confuses me concerning the values parameter: MIRR(values,finance_rate,reinvest_rate) IRR(values,guess) Thanks in advance for your adivce, Rick |
#4
Posted to microsoft.public.excel.worksheet.functions
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Proper use of the MIRR (and IRR)
Rick,
It is the net cash flow. So you enter your inflows and your outflows in the normal statement format and have a net cash flow for the period/year and then you apply the IRR/MIRR formula on the net values with -ves as outflows and +ves as inflows or the other way around if you prefer. -- Hope this helps Martin Fishlock, Bangkok, Thailand Please do not forget to rate this reply. "nostabo" wrote: Thanks Martin, But what really has me confused is how to list the values. If I have outflows and inflows for 5 years, do I list the outflows first or alternate them by year like: (Year 1 outflow, Year 1 inflow, Year 2 outflow, Year 2 inflow, Year 3 outflow, Year 3 inflow, Year 4 outflow, Year 4 inflow, Year 5 outflow, Year 5 inflow) ....and if there is a year or two with a zero outflow and/or inflow should they be listed as 0 in the range (array), or simply left out. Rick "Martin Fishlock" wrote in message ... IRR(values,guess) values are a range of values ie B2:B6, where B2=initial cash outflow/inflow (t0) B3=cashflow at theend of t1... and the guess is a seed value which is optional MIRR MIRR(values,finance_rate,reinvest_rate) Values are the same as IRR Finance_rate is the interest rate you pay on the money used in the cash flows. Reinvest_rate is the interest rate you receive on the cash flows as you reinvest them. eg: IRR(B2:B6) MIRR(B2:B6,.1,.05) -- Hope this helps Martin Fishlock, Bangkok, Thailand Please do not forget to rate this reply. "nostabo" wrote: I want to provide a MIRR and an IRR analysis for the implementation of proposed systems. As such I have 5 years of expenses for the analysis period and 5 years of revenue. All of these values are from the year-end. How do I setup the IRR and MIRR parameters. The function prototypes (and the Excel help) slightly confuses me concerning the values parameter: MIRR(values,finance_rate,reinvest_rate) IRR(values,guess) Thanks in advance for your adivce, Rick |
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