Step 2: Calculating the Present Value of Outflows Next, you determine the present value of all negative cash flows (outflows). 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.
Calculate Project Cost Present Value MIRR Using BA II Plus TVM Functions
You will use the BA II Plus TVM solver to input each cash flow's value and its respective number of periods, calculating the future value at the specified reinvestment rate. The calculation follows a specific three-step sequence that aligns perfectly with the BA II Plus's functionality.
These are typically the initial investment or subsequent costs. On the BA II Plus, you input these cash flows as negative numbers and solve for the present value.
Calculate Project Cost Present Value MIRR Using BA II Plus TVM Functions
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. 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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