Question

Find the modified internal rate of return (MIRR) for the following series of future cash flows...

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.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Future value of 1 cash flow = 130,600 (1 + 0.1292)4 = 212,337.478

Future value of 2 cash flow = 178,600 (1 + 0.1292)3 = 257,154.4612

Future value of 3 cash flow = 147,800 (1 + 0.1292)2 = 188,458.6922

Future value of 4 cash flow = 133,600 (1 + 0.1292)1 = 150,861.12

Future value of 5 cash flow = 155,700 (1 + 0.1292)0 = 155,700

Future value = 212,337.478 + 257,154.4612 + 188,458.6922 + 150,861.12 + 155,700 = 964,511.7514

MIRR = (Future value / initial investment)1/n - 1

MIRR = (964,511.7514 / 439,500)1/5 - 1

MIRR = 1.1702 - 1

MIRR = 0.1702 or 17.02%

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
Find the modified internal rate of return (MIRR) for the following series of future cash flows...
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?
6C5 Tall Trees, Inc. is using the modified internal rate of return (MIRR) when evaluating projects....
6C5 Tall Trees, Inc. is using the modified internal rate of return (MIRR) when evaluating projects. The company is able to reinvest cash flows received from the project at an annual rate of 12.33 percent. What is the MIRR of a project if the initial costs are $1,415,400 and the project life is estimated as 9 years? The project will produce the same after-tax cash inflows of 570,900 per year at the end of the year. Round the answer to...
Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the...
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...
6B4 A project has an initial outlay of $3,480. It has a single payoff at the...
6B4 A project has an initial outlay of $3,480. It has a single payoff at the end of year 3 of $9,922. What is the net present value (NPV) of the project if the company’s cost of capital is 11.97 percent? 6C4 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 11.59 percent.The initial outlay...
4. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from...
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 $500,000....
Find the modified internal rate of return for the following annual series of cash flows: given...
Find the modified internal rate of return for the following annual series of cash flows: given a discounted rate of 10.50%: year 0 - 60,000$: year 1: 15,000$, Year 2: 16,000$, Year 3:17,000$ and year 4: 17,00$
4. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from...
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...
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....
What is the Modified Internal Rate of Return (MIRR) for the following cash flows? Assume that...
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
8. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from...
8. 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 : Cute Camel Woodcraft Company is analyzing a project that requires an initial investment of $3,225,000....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT