How to Use the IMCSC Function in Excel
The IMCSC function is a sophisticated tool in Excel that calculates the modified internal rate of return (MIRR) for a sequence of cash flows, which may include various investments and withdrawals occurring at different times.
How IMCSC Works in Excel and Google Sheets
The syntax for the IMCSC function is as follows:
=IMCSC(values, finance_rate, reinvest_rate)- values: An array or a reference to cells containing the cash flows.
- finance_rate: The discount rate to apply to the cash flows.
- reinvest_rate: The rate at which positive cash flows are presumed to be reinvested.
Examples of Using IMCSC Function
Consider a scenario where you invest $1000 initially and receive $500 after one year, followed by $800 after two years. You aim to calculate the modified internal rate of return for this series of transactions, assuming that positive cash flows are reinvested at a rate of 5%.
| Year | Cash Flow |
|---|---|
| 0 | -$1000 |
| 1 | $500 |
| 2 | $800 |
Apply the IMCSC function in Excel or Google Sheets like so:
=IMCSC({-1000, 500, 800}, 0.1, 0.05)This formula calculates the modified internal rate of return, taking into account a finance rate of 10% and a reinvestment rate of 5%.
The IMCSC function is invaluable for evaluating investments that include multiple cash flows and opportunities for reinvestment, as it provides a more precise reflection of the investment’s return.
More information: https://support.microsoft.com/en-us/office/imcsc-function-9e158d8f-2ddf-46cd-9b1d-98e29904a323