Modified Internal Rate Of Return - HP 17bll+ User Manual

Keys:
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 1 
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e
35 
v
8.175 28
-
v

0 
3000 
&
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8 
0 
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Modified Internal Rate of Return

When there is more than one sign change (positive to negative or
negative to positive) in a series of cash flows, there is a potential for
more than one IRR% . For example, the cash-flow sequence in the
following example has three sign changes and hence up to three
potential internal rates of return. (This particular example has three
positive real answers: 1.86, 14.35, and 29.02% monthly.)
The Modified Internal Rate of Return (MIRR) procedure is an alternative
that can be used when your cash-flow situation has multiple sign
changes. The procedure eliminates the sign change problem by utilizing
reinvestment and borrowing rates that you specify. Negative cash flows
are discounted at a safe rate that reflects the return on an investment in
Display:
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   


%




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
Description:
Displays TVM menu.
Sets 1 payment per year
and Begin mode.
Stores years until
retirement.
Calculates and stores
interest rate diminished by
tax rate.
Stores no present value.
Stores annual payment.
Calculates future value.
Calculates present-value
purchasing power of the
above FV at 8%
inflation.
14: Additional Examples 209