Question

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

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%.