Question

Find the modified internal rate of return for the following annual series of cash flows: given a discounted rate of 10.50%: year 0 - 60,000$: year 1: 15,000$, Year 2: 16,000$, Year 3:17,000$ and year 4: 17,00$

Answer #1

1] | The MIRR assumes that intervening cash flows | |

are reinvested at the WACC [discount rate]. | ||

Thus, total FV of the cash inflows = 15000*1.105^3+16000*1.105^2+17000*1.105+17000 = | $ 75,560 | |

Now all the cash inflows have been taken to t4. | ||

2] | MIRR = (75560/60000)^(1/4)-1 = |
5.93% |

Note: | ||

The year 4 cash flow is shown as $17,00. It is | ||

presumed that it is $17,000. |

Find the modified internal rate of return (MIRR) for the
following series of future cash flows if the company is able to
reinvest cash flows received from the project at an annual rate of
12.92 percent. the initial outlay is $439,500.
Year 1: $130,600
year 2: 178,600
year3: 147,800
Year 4: 133,600
Year 5: 155,700
Round answer to two decimal places.

Find the modified internal rate of return (MIRR) for the
following series of future cash flows if the company is able to
reinvest cash flows received from the project at an annual rate of
13.72 percent.The initial outlay is $470,600.
Year 1: $185,900
Year 2: $185,100
Year 3: $125,700
Year 4: $183,400
Year 5: $184,100
Round the answer to two decimal places in percentage
form.
How do I do this in excel?

What is the Modified Internal Rate of Return (MIRR) for the
following cash flows? Assume that the required rate of return is
4%
Year
CFs
0
-1,000
1
100
2
200
3
350
4
800

1. What's the internal rate of return of the following cash
flows with a 8% WACC?
2. What's the modified internal rate of return of the following
cash flows with a 8% WACC?
Year 0 = 100,000
Year 1 = 10,000
Year 2 = 50,000
Year 3 = 45,000
Year 4 = 25,000
3. How long should a company keep the following project?
WACC = 8%
CF year 0 = 1,500,000
Salvage = 1,500,000
CF year 1 = 750,000
Salvage...

A project will generate the following cash flows. If the
required rate of return is 15%, what is the project’s net present
value?
Year
Cash flow
0
–$50,000
1
$15,000
2
$16,000
3
$17,000
4
$18,000
5
$19,000
Select one:
a. $16,790.47
b. $6,057.47
c. $3,460.47
d. $1,487.21
e. –$3,072.47
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Question text
A project will generate the following cash flows. The required
rate of return is 15%. If the...

What are the Net Present Value and Internal Rate of Return for
the following cash flows - assuming a 3.5% discount rate?
Year 0: ($35,900)
Year 1: $20,750
Year 2: ($16,750)
Year 3: $32,100
Year 4: $12,525
Year 5: $18,220
Is the project profitable on a discounted basis? Is it something
we would want to pursue as an organization?

Modified internal rate of return (MIRR)
The IRR evaluation method assumes that cash flows from the
project are reinvested at the same rate equal to the IRR. However,
in reality the reinvested cash flows may not necessarily generate a
return equal to the IRR. Thus, the modified IRR approach makes a
more reasonable assumption other than the project’s IRR.
Consider the following situation:
Fuzzy Button Clothing Company is analyzing a project that
requires an initial investment of $500,000. The project’s...

4. Modified internal rate of return (MIRR)
The IRR evaluation method assumes that cash flows from the
project are reinvested at the same rate equal to the IRR. However,
in reality the reinvested cash flows may not necessarily generate a
return equal to the IRR. Thus, the modified IRR approach makes a
more reasonable assumption other than the project’s IRR.
Consider the following situation:
Green Caterpillar Garden Supplies Inc. is analyzing a project
that requires an initial investment of $2,500,000....

4. Modified internal rate of return (MIRR)
The IRR evaluation method assumes that cash flows from the
project are reinvested at the same rate equal to the IRR. However,
in reality the reinvested cash flows may not necessarily generate a
return equal to the IRR. Thus, the modified IRR approach makes a
more reasonable assumption other than the project’s IRR.
Consider the following situation:
Green Caterpillar Garden Supplies Inc. is analyzing a project
that requires an initial investment of $3,225,000....

4. Modified internal rate of return (MIRR)
The IRR evaluation method assumes that cash flows from the
project are reinvested at the same rate equal to the IRR. However,
in reality the reinvested cash flows may not necessarily generate a
return equal to the IRR. Thus, the modified IRR approach makes a
more reasonable assumption other than the project’s IRR.
Consider the following situation:
Cold Goose Metal Works Inc. is analyzing a project that requires
an initial investment of $500,000....

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