Internal Rate of Return (IRR & MIRR) Calculator
What is the internal rate of return (IRR) and modified IRR (MIRR) generated by my project cash flows?
Financial Inputs
Cost of debt and capital used to fund negative cash flows.
Realistic rate at which positive interim cash flows can be redeployed.
Internal Rate of Return (IRR)
T
Modified IRR (MIRR)
18.7
Net Nominal Surplus Cash
4,00,00,000
Key Financial Takeaways
- The project generates an attractive Internal Rate of Return of 24.7%, surpassing the 12% cost of capital by a positive spread of 12.7% (MIRR: 18.7%).
Frequently Asked Questions
Why does Modified IRR (MIRR) provide a more dependable metric than standard IRR?
Classical IRR relies on the unrealistic mathematical assumption that all intermediate cash inflows can be reinvested at the project own high IRR. MIRR corrects this by assuming interim cash is reinvested at realistic money-market or treasury rates, delivering a more prudent return figure.
What IRR do Indian commercial banks look for in project finance appraisals?
Banks generally require an Project IRR that exceeds the lending rate by at least 400 to 500 basis points. For a debt facility priced at 10.5%, banks expect a base project IRR of 15% to 16% or higher.
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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