Moic To Irr Calculator
MOIC to IRR Calculator
Enter initial investment amount and final value. Input investment period in years in Moic To Irr calculator. The calculator will compute both MOIC (Multiple of Invested Capital) and estimate IRR (Internal Rate of Return) based on these values.
- Inputs: Initial investment = $100,000, Final value = $250,000, Period = 3 years
- Process: Enter values and select investment period
- Result: MOIC = 2.5x, Estimated IRR = 35.72%
MOIC to IRR Conversion Chart
MOIC | Holding Period (Years) | IRR (Approx.) | Explanation |
---|---|---|---|
1.0x | 5 | 0% | No return (break-even). |
1.5x | 5 | ~8.4% | 1.5x return over 5 years. |
2.0x | 5 | ~14.9% | 2x return over 5 years. |
3.0x | 5 | ~24.6% | 3x return over 5 years. |
5.0x | 5 | ~37.9% | 5x return over 5 years. |
10.0x | 5 | ~58.5% | 10x return over 5 years. |
How to Calculate MOIC to IRR
To convert MOIC to IRR, first determine MOIC by dividing final value by the initial investment. Then calculate the IRR using the investment period, which represents the annualized return required to reach the given multiple.
The IRR is found using the power rule formula which considers both the multiple and time period.
- Inputs: Investment of $1M returns $2M in 4 years
- Calculations: MOIC = 2.0x, IRR = (2.0^(1/4) – 1) × 100
- Result: The estimated IRR is 18.92%
MOIC to IRR Formula
MOIC = Final Value ÷ Initial Investment
IRR = (MOIC^(1/n) - 1) × 100
Where:
MOIC = Multiple of Invested Capital
n = Investment Period in Years
IRR = Internal Rate of Return (%)
Venture Capital Investment
- Inputs: Initial = $500,000, Final = $2,000,000, Period = 5 years
- Calculations: MOIC = 2,000,000/500,000 = 4.0x, IRR = (4.0^(1/5) – 1) × 100
- Result: MOIC = 4.0x, IRR = 32.01%
Real Estate Deal
- Inputs: Initial = $2,000,000, Final = $3,500,000, Period = 3 years
- Calculations: MOIC = 3,500,000/2,000,000 = 1.75x, IRR = (1.75^(1/3) – 1) × 100
- Result: MOIC = 1.75x, IRR = 20.45%
Growth Equity Investment
- Inputs: Initial = $1,500,000, Final = $4,500,000, Period = 4 years
- Calculations: MOIC = 4,500,000/1,500,000 = 3.0x, IRR = (3.0^(1/4) – 1) × 100
- Result: MOIC = 3.0x, IRR = 31.61%
Startup Investment
- Inputs: Initial = $250,000, Final = $2,000,000, Period = 6 years
- Calculations: MOIC = 2,000,000/250,000 = 8.0x, IRR = (8.0^(1/6) – 1) × 100
- Result: MOIC = 8.0x, IRR = 41.42%
Business Acquisition
- Inputs: Initial = $5,000,000, Final = $7,500,000, Period = 2 years
- Calculations: MOIC = 7,500,000/5,000,000 = 1.5x, IRR = (1.5^(1/2) – 1) × 100
- Result: MOIC = 1.5x, IRR = 22.47%
What is MOIC and IRR?
MOIC (Multiple of Invested Capital): A financial metric that measures the gross return on an investment, calculated as the total value returned divided by the total amount invested.
MOIC = Total Value / Initial Investment
IRR (Internal Rate of Return): A metric that calculates the annualized return of an investment, considering the time value of money and timing of cash flows.
IRR = Rate at which NPV = 0
Where NPV = Present Value of all Cash Flows