Question

What is the MIRR of a project that costs $675, generates free cash inflows of $254...

What is the MIRR of a project that costs $675, generates free cash inflows of $254 at the end of each of the first 3 years and an outflow of 117 at the end of Year 4? The reinvestment rate is 7.03%. (Record your answer to the nearest 0.01%, drop the % symbol. E.g., if your answer is 10.7745%, record it as 10.77.)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

MIRR can be calculated by two methods.

In first method, we can use Excel MIRR function, =MIRR(values,finance_rate,reinvest_rate)

In second method, MIRR = [(FV(positive cash flows, reinvestment rate) / PV(negative cash flows, finance rate)] ^ (1/n) - 1

In this case, both the finance rate and reinvest rate is same i.e. 7.03%

Both the methods have been shown below.

Note: Give it a thumbs up if it helps! Thanks in advance!

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
What is the MIRR of a project that costs $677, generates free cash inflows of $261...
What is the MIRR of a project that costs $677, generates free cash inflows of $261 at the end of each of the first 4 years and an outflow of 102 at the end of Year 5? The reinvestment rate is 6.98%. (Record your answer to the nearest 0.01%, drop the % symbol. E.g., if your answer is 10.7745%, record it as 10.77.)
MIRR Project L costs $70,000, its expected cash inflows are $9,000 per year for 8 years,...
MIRR Project L costs $70,000, its expected cash inflows are $9,000 per year for 8 years, and its WACC is 11%. What is the project's MIRR? Round your answer to two decimal places. Do not round your intermediate calculations. %
MIRR A project has an initial cost of $48,025, expected net cash inflows of $8,000 per...
MIRR A project has an initial cost of $48,025, expected net cash inflows of $8,000 per year for 12 years, and a cost of capital of 13%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. Profitability Index A project has an initial cost of $45,950, expected net cash inflows of $13,000 per year for 10 years, and a cost of capital of 12%. What is the project's PI? Do not round...
MIRR A project has an initial cost of $61,500, expected net cash inflows of $11,000 per...
MIRR A project has an initial cost of $61,500, expected net cash inflows of $11,000 per year for 8 years, and a cost of capital of 10%. What is the project's MIRR? Round your answer to two decimal places. %
Problem 9-20 MIRR [LO6] RAK Corp. is evaluating a project with the following cash flows:   ...
Problem 9-20 MIRR [LO6] RAK Corp. is evaluating a project with the following cash flows:    Year Cash Flow 0 –$ 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...
MIRR A project has an initial cost of $40,500, expected net cash inflows of $15,000 per...
MIRR A project has an initial cost of $40,500, expected net cash inflows of $15,000 per year for 12 years, and a cost of capital of 14%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.
MIRR A project has an initial cost of $39,450, expected net cash inflows of $11,000 per...
MIRR A project has an initial cost of $39,450, expected net cash inflows of $11,000 per year for 10 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.
1. Project A, which costs of $1,000 to purchase, will generate net cash inflows equal to...
1. Project A, which costs of $1,000 to purchase, will generate net cash inflows equal to $500 at the end of each of the next three years. The project's required rate of return is 10 percent. What are the project's internal rate of return (IRR) and modified internal rate of return (MIRR)? 23.4%; 38.2% 14.5%; 12.6% 16.7%; 18.3% 23.4%; 16.7% 23.4%; 18.3% 2. The internal rate of return (IRR) of a project that generates its largest cash flows in the...
Problem 10-3 MIRR A project has an initial cost of $42,875, expected net cash inflows of...
Problem 10-3 MIRR A project has an initial cost of $42,875, expected net cash inflows of $12,000 per year for 9 years, and a cost of capital of 12%. What is the project's MIRR? Round your answer to two decimal places. Problem 10-7 NPV Your division is considering two investment projects, each of which requires an up-front expenditure of $17 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B 1 $  5,000,000...
a. Project L costs $42,220.68, its expected cash inflows are $9,000 per year for 11 years,...
a. Project L costs $42,220.68, its expected cash inflows are $9,000 per year for 11 years, and its WACC is 12%. What is the project's IRR? Round your answer to two decimal places. b.Project L costs $45,000, its expected cash inflows are $13,000 per year for 8 years, and its WACC is 14%. What is the project's MIRR? Round your answer to two decimal places. Do not round your intermediate calculations. c. Project L costs $70,000, its expected cash inflows...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT