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
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

As the MIRR is greater than discount rate, the project should be accepted.

Working:-

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
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....
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
28. What is the modified internal rate of return (MIRR) for the following project? The cost...
28. What is the modified internal rate of return (MIRR) for the following project? The cost of capital is 10%. Time 0 1 2 3 Project A -$350 $300 -$100 $200 a. 10.35% b. 9.18% c. 10.25% d. 8.50% 31. Simkins Renovations Inc. is considering a project that has the following cash flow data. What is the project's IRR? Year 0 1 2 3 4 Cash flows -$825 $296 $285 $300 $320 a. 16.65% b. 14.61% c. 17.24% d. 13.59%
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT