Question

Compute the MIRR statistic for Project J if the appropriate cost of capital is 8 percent....

Compute the MIRR statistic for Project J if the appropriate cost of capital is 8 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project J
Time: 0 1 2 3 4 5
Cash flow: −$2,700 $860 $2,330 −$690 $810 −$270



Should the project be accepted or rejected?

  • accepted

  • rejected

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Given about a project,

Cost of capital r = 8%

Cash flows are as follow:

C0 = -$2700

CF1 = $860

CF2 = $2330

CF3 = -$690

CF4 = $810

CF5 = -$270

So, MIRR of the project = (sum of FV of positive cash flows/sum of PV of negative cash flow)^(1/t) - 1

So, Sum of FV of positive cash flow = 860*1.08^4 + 2330*1.08^3 + 810*1.08^2 = $5049.93

Sum of PV of negative cash flow = 2700 + 690/1.08^3 + 270/1.08^5 = $3431.50

So, MIRR = (5049.93/3431.50)^(1/5) - 1 = 8.03%

Since MIRR is greater than Cost of capital, project should be accepted.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Compute the MIRR statistic for Project J if the appropriate cost of capital is 9 percent....
Compute the MIRR statistic for Project J if the appropriate cost of capital is 9 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project J Time: 0 1 2 3 4 5 Cash flow –$2,000 $650 $1,980 –$620 $600 –$200 MIRR % Should the project be accepted or rejected? Accepted Rejected
compute the MIRR statistic for project I if the appropriate cost of capital is 13 percent...
compute the MIRR statistic for project I if the appropriate cost of capital is 13 percent (Do not round intermediate calculations and round your final answer to 2 decimal places) Project I Time 0 1 2 3 4 Cash flow -$11,500 $5,580 $4,430 $1,770 $2,250
Compute the MIRR statistic for Project I if the appropriate cost of capital is 11 percent....
Compute the MIRR statistic for Project I if the appropriate cost of capital is 11 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)       Project I   Time: 0 1 2 3 4   Cash flow –$12,300 $5,980 $4,830 $2,170 $2,650
Compute the PI statistic for Project Q if the appropriate cost of capital is 13 percent....
Compute the PI statistic for Project Q if the appropriate cost of capital is 13 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Q Time: 0 1 2 3 4 Cash flow: −$11,800 $3,750 $4,580 $1,920 $2,550 Should the project be accepted or rejected? rejected accepted
Compute the PI statistic for Project Q if the appropriate cost of capital is 11 percent....
Compute the PI statistic for Project Q if the appropriate cost of capital is 11 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)      Project Q   Time: 0 1 2 3 4   Cash flow –$12,300 $4,000 $4,830 $2,170 $2,800      PI       Should the project be accepted or rejected? Accepted Rejected
Compute the IRR static for Project E. The appropriate cost of capital is 8 percent. (Do...
Compute the IRR static for Project E. The appropriate cost of capital is 8 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)         Project E   Time: 0 1 2 3 4 5   Cash flow –$2,700 $830 $840 $760 $540 $340 IRR % ____________ Should the project be accepted or rejected? _________
Compute the IRR statistic for Project F. The appropriate cost of capital is 11 percent. (Do...
Compute the IRR statistic for Project F. The appropriate cost of capital is 11 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project F Time: 0 1 2 3 4 Cash flow: −$11,600 $4,150 $4,980 $2,320 $2,950 Should the project be accepted or rejected? accepted rejected
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8...
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project C Time: 0 1 2 3 4 5 Cash flow: –$1,300 $600 $570 $610 $360 $160 Should the project be accepted or rejected? accepted rejected
Compute the NPV statistic for Project Y if the appropriate cost of capital is 11 percent....
Compute the NPV statistic for Project Y if the appropriate cost of capital is 11 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal place.) Project Y Time: 0 1 2 3 4 Cash flow: –$9,300 $3,610 $4,440 $1,780 $560 NPV $ _________ Should the project be accepted or rejected? _____________
Compute the NPV statistic for Project U if the appropriate cost of capital is 10 percent....
Compute the NPV statistic for Project U if the appropriate cost of capital is 10 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project U Time: 0 1 2 3 4 5 Cash flow: –$1,600 $590 $2,080 –$640 $540 –$220 NPV= Should the project be accepted or rejected?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT