Question

Malholtra Inc. is considering a project that has the following cash flow and WACC data. What...

Malholtra Inc. is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note that a project's MIRR can be less than the WACC (and even negative), in which case it will be rejected.

WACC: 12.25%

Year 0 1 2 3 4

Cash flows -$1700 $600 $640 $680 $720

Homework Answers

Answer #1
Year Cash flow
0 -1700
1 600
2 640
3 680
4 720
WACC 12.25%
MIRR = =mirr(C2:C6,finance rate,reinvestment rate)
= =MIRR(C2:C6,12.25%,12.25%)
= 16.56%
C2:C6 is the range of cash flow from year 0 to Year 4.
Finance as well as reinvestment rate is 12.25%.
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