Question

A project has an initial cost of $64,400, expected net cash inflows of $10,000 per year for 11 years, and a cost of capital of 12%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.

Answer 1

Year	Cash Inflows	Future Value Factor	Future cash inflows
1	10000	1.12	11200
2	10000	1.2544	12544
3	10000	1.4049	14049
4	10000	1.5735	15735
5	10000	1.7623	17623
6	10000	1.9738	19738
7	10000	2.2107	22107
8	10000	2.476	24760
9	10000	2.7731	27731
10	10000	3.3946	33946
11	10000	3.4785	34785

Total future value of cash inflows = 234,218

MIRR = cash outflows =Future value of cash inflows or terminal value

64,400 = 234218/ (1+r)¹¹

= (1+r)¹¹ =234218 /64,400

= (1+r) ¹¹ = 3.636925

= (1+r) = 1.12454

r = 1.123223 – 1 = 0.12454 = 12.45%

MIRR= 12.45%