aliquid account. The figure generally used is a short-term security (T-bill) or bank passbook rate. Positive cash flows are reinvested at a reinvestment rate that reflects the return on an investment of comparable risk. An average return rate on recent market investments might be used.

1.In the CFLO menu, calculate the present value of the negative cash flows (NPV) at the safe rate and store the result in register 0. Enter zero for any cash flow that is positive.

2.Calculate the future value of the positive cash flows (NFV) at the reinvestment rate and store the result in register 1. Enter zero for any cash flow that is negative.

3.In the TVM menu, store the total number of periods in N, the NPV result in PV, and the NFV result in FV.

4.Press to calculate the periodic interest rate. This is the modified internal rate of return, MIRR.

Example: Modified IRR. An investor has an investment opportunity with the following cash flows:

Group

No. of Months

Cash Flow, $

(FLOW no.)

(#TIMES)

 

0

1

－180,000

1

5

100,000

2

5

－100,000

3

9

0

4

1

200,000

Calculate the MIRR using a safe rate of 8% and a reinvestment (risk) rate of 13%.

Keys:

 

 

 

 

Display:

Description:

 

 

 

 

 

Displays current cash-flow

 

 

 

 

 

 

 

 

list.

 

Clears current list or gets a

@c

210 14: Additional Examples

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