Question

Sam Corp. is considering a project that has the following cash flow data.  What is the project's IRR (Internal Rate of Return)? Note that a project's projected IRR can be less than the weighted average cost of capital (WACC) or negative, in both cases it will be rejected. Show work.

Year                           0                1                2               3           4  

Cash flows            -$1,900        $600          $825           $950   -$50

Helmand 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 projected MIRR can be less than the WACC (and even negative), in which case it will be rejected. Weighted Average Cost of Capital (WACC):  12.25%

            Show work.

Year                           0                1                2                3                4     

Cash flows             -$900         $300          $320          $340          $360

River Associates is considering a project that has the following cash flow data. What is the project's payback?

Year                           0                1                2                3                4                5     

Cash flows            -$1,100        $300          $310          $320          $330          $340

Answer 1