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. Practical Example and Data Entry.
Solve MIRR Using FV Register BA II Plus by Compounding Inflows to End of Project
Step 2: Calculating the Present Value of Outflows Next, you determine the present value of all negative cash flows (outflows). For example, if you have a $1,000 inflow in year 1 and a $2,000 inflow in year 2, you would calculate the future value of the $1,000 for two years and add it to the $2,000.
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. The calculation follows a specific three-step sequence that aligns perfectly with the BA II Plus's functionality.
Solve MIRR Using FV Register BA II Plus
To calculate the Modified Internal Rate of Return (MIRR) on a BA II Plus, you first need to understand that this financial calculator does not have a dedicated MIRR key. 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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