The process involves determining the future value of positive cash flows and the present value of negative cash flows, then using those results to solve for the MIRR. This step answers the question: "What is the total cost of the project today, accounting for the time value of money?" Step 3: Solving for the MIRR With the future value of inflows (FV) and the present value of outflows (PV) calculated, you can now determine the MIRR.
Step 1: Calculating the Future Value of Inflows
These are typically the initial investment or subsequent costs. Unlike higher-end models, the BA II Plus requires you to perform the calculation using the built-in time value of money (TVM) functions and manual steps.
It is often efficient to calculate these sequentially, using the "FV" register to accumulate the total future value of all inflows. Practical Example and Data Entry.
Step 1: Calculating the Future Value of Inflows
Step 1: Calculating the Future Value of Inflows The first step requires you to take all positive cash flows (inflows) and compound them forward to the end of the project's life. This step effectively answers the question: "What is the total value of all cash inflows at the end of the project if they are invested at the cost of capital?" Handling Multiple Cash Flows If your project has multiple positive cash flows at different points in time, you must calculate the future value of each one individually.
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