Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnlyHint=true and idempotentHint=true, so the safety profile is clear. The description adds valuable behavioral context by explaining how negative cashflows are financed at financeRate and positives reinvested at reinvestRate, which reveals the core mechanism beyond the annotations. No contradictions exist.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is a single, dense sentence that front-loads the key concept and includes all essential information without any wasted words. It is highly concise while retaining clarity.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given the simplicity of the calculation and the presence of both input and output schemas, the description covers the necessary context: the formula's behavior, rate units, and cashflow direction. It could optionally mention constraints like needing at least one positive and one negative cashflow, but that is a mathematical requirement not essential for an agent to invoke the tool correctly.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100%, so the baseline is 3. The description adds meaning by stating 'Percents in and out', clarifying that both rates are in percent (not decimal), and by describing the directional mapping of rates to cashflow signs. This goes beyond the schema's simple 'Finance rate in percent' descriptions.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly identifies the tool as 'Modified internal rate of return' and immediately distinguishes it from plain IRR by specifying that negatives are financed at financeRate and positives reinvested at reinvestRate. This is a specific calculation with a clear resource and scope, effectively differentiated from sibling tools like 'irr' and 'xirr'.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description implies usage for MIRR calculations with explicit finance and reinvestment rates, but it does not explicitly state when to choose MIRR over IRR/XIRR or mention any exclusions. The context is adequate for a basic understanding but lacks direct guidance on alternatives.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.