Question
Based on the MIRR of the following project, using the Reinvestment approach and a discount rate...
Based on the MIRR of the following project, using the Reinvestment approach and a discount rate of 12.23 percent, should the project be accepted?
| Year | Cash Flow |
| 0 | $-82,149 |
| 1 | $51,666 |
| 2 | $41,211 |
| 3 | $63,309 |
| 4 | $-40,760 |
Homework Answers
Answer #1
As the MIRR is greater than discount rate, the project should be accepted.
Working:-
Not the answer you're looking for?
Similar Questions
Problem 9-20 MIRR [LO6] RAK Corp. is evaluating a project with the following cash flows: ...
Problem 9-20 MIRR [LO6]
RAK Corp. is evaluating a project with the following cash
flows:
Year
Cash Flow
0
–$
30,000
1
12,200
2
14,900
3
16,800
4
13,900
5
–
10,400
The company uses a discount rate of 12 percent and a
reinvestment rate of 7 percent on all of its projects.
Calculate the MIRR of the project using the discounting
approach. (Do not round intermediate calculations. Enter
your answer as a percent rounded to 2...
Solo Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 –$12,400...
Solo Corp. is evaluating a project with the following cash
flows: Year Cash Flow
0 –$12,400
year
cash flow
0
- $12,400
1
$5,900
2
$6,200
3
$5,900
4
$4,800
5
-$4,400
The company uses a disount rate of 11 percent and a reinvestment
rate of 8 percent on all of its projects. Calculate the MIRR of the
project using all three methods using these interest rates
. a. MIRR using the discounting approach.
b. MIRR using the reinvestment approach....
M Company is evaluating a project with the following cash flows. The company uses a discount...
M Company is evaluating a project with the following cash
flows. The company uses a discount rate of 8% and a reinvestment
rate of 5% on all of its projects.
Year
Cash Flow
-16,800
7,900
9,100
8,700
7,500
-4,900
Calculate the MIRR of the project using all three methods with
the above interest rates.
1.Discounting Approach
2. Reinvestment approach
3. Combination Approach
Sheakley Industries is considering expanding its current line of business and has developed the following expected...
Sheakley Industries is considering expanding its current line of
business and has developed the following expected cash flows for
the project. Should this project be accepted based on the
discounting approach to the modified internal rate of return if the
discount rate is 13.4 percent? Why or why not?
Year: Cash Flow
0 -385000
1 67,500
2 246,100
3 164,500
4 -22,700
Group of answer choices
No; The MIRR is 12.00 percent.
Yes; The MIRR is 7.59 percent.
No; The...
Yellow Day has a project with the following cash flows: Year Cash Flows 0: −$25,400 1:...
Yellow Day has a project with the following cash flows:
Year Cash Flows
0: −$25,400
1: 9,750
2: 13,900
3: 8,760
4: −2,800
What is the MIRR for this project using the reinvestment
approach? The interest rate is 7 percent
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
7 Find the MIRR assuming a 4 % reinvestment rate using the following cash flows: T0...
7 Find the MIRR assuming a 4 % reinvestment rate using the
following cash flows: T0 = -39,000 T1 = + 20,000 T2 = + 30,000
Based on the profitability index rule, should a project with the following cash flows be accepted...
Based on the profitability index rule, should a project with the
following cash flows be accepted if the discount rate is 15
percent? Why or why not? (i.e. Calculate the profitability index
(PI) and explain why the project should or should not be
accepted.)
Year: 0,1,2,3
Cash Flow: -32100, 11,800, 0, 22,600
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
What is the MIRR of the following two year investment in a delivery van? The projected...
What is the MIRR of the following two year investment in a
delivery van? The projected reinvestment rate (discount rate) is
10%. The project will require an investment of $50,000 today and
expected cash flow of $30,000 in Year 1; and $30,000 in year 2.
RECORD YOUR ANSWER AS A DECIMAL
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 4 minutes ago
asked 12 minutes ago
asked 22 minutes ago
asked 30 minutes ago
asked 36 minutes ago
asked 36 minutes ago
asked 53 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago