Homework Answers
MIRR is calculated using MIRR function in Excel
MIRR is 15.92%
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For the net cash flow series. Find the externote ofrecen (EROR using the IRR method with...
For the net cash flow series, find the external rate of return (EROR) using the MIRR...
For the net cash flow series, find the external rate of return (EROR) using the MIRR method with an investment rate of 25% per year and a borrowing rate of 12% per year Net Cash Flow, $ -6.000 The external rate of return is %
For the net cash flow series, find the external rate of return (EROR) using the MIRR...
For the net cash flow series, find the external rate of return (EROR) using the MIRR method with an investment rate of 18% per year and a borrowing rate of 12% per year. Year 1 2 3 4 5 6 Net Cash Flow, $ 5,000 -5,000 -9,000 11,000 -1,500 4,000 The external rate of return is %.
Consider the following cash flow and compute the approximate IRR for the investment: Net Cash Flow...
Consider the following cash flow and compute the approximate IRR for the investment: Net Cash Flow -$35,000 3,000 7,000 12,000 28,000 25,000 OA. 36% O B.27% OC. 23% OD. 18%
The IRR evaluation method assumes that cash flows from the project are reinvested at a rate...
The IRR evaluation method assumes that cash flows from the project are reinvested at a rate equal to the project’s IRR. However, in reality, the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, using the modified IRR approach, you can make a more reasonable estimate of a project’s rate of return than the project’s IRR can. Consider the following situation: Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment...
14. Consider four projects with the following sequences of cash flows: n 0 NET CASH FLOWS...
14. Consider four projects with the following sequences of cash flows: n 0 NET CASH FLOWS A B C -$25,000|-$23,000-$56,500 $12,000 $32,000 -$2,500 $23,000 $32,000-$6,459 $34,000 $25,000 $88,345 3 (a) Identify all the simple investments. (b) Identify all the non-simple investments. (c) Compute the Internal Rate of Return (IRR) for each project using NPV method and Excel. Note the following: A simple (or conventional) investment is simply when one sign change occurs in the net cash flow series. If the...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same...
The IRR evaluation method
assumes that cash flows from the project are reinvested at the same
rate equal to the IRR. However, in reality the reinvested cash
flows may not necessarily generate a return equal to the IRR. Thus,
the modified IRR approach makes a more reasonable assumption other
than the project’s IRR.
4. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the...
1. Do this problem by using only PW method: What is the IRR of a 20-year...
1. Do this problem by using only PW method: What is the IRR of a 20-year annual cash-flow investment of $1020 per year if the first year amount of $1020 is invested at the end of the first year, and the investment pays a single payment of $66,000 at the end of the 20th year?
The IRR evaluation method assumes that cash flows from the project are reinvested at the same...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $500,000. The project's expected cash flows are: Year Year 1...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment of $500,000. The project's expected cash flows are: Year...
. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from...
. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project’s IRR. Consider the following situation: Grey Fox Aviation Company is analyzing a project that requires an initial investment of $600,000. The...
For the net cash flow series, find the external rate of return (EROR) using the MIRR method with an investment rate of 25% per year and a borrowing rate of 12% per year Net Cash Flow, $ -6.000 The external rate of return is %
Consider the following cash flow and compute the approximate IRR for the investment: Net Cash Flow -$35,000 3,000 7,000 12,000 28,000 25,000 OA. 36% O B.27% OC. 23% OD. 18%
14. Consider four projects with the following sequences of cash flows: n 0 NET CASH FLOWS A B C -$25,000|-$23,000-$56,500 $12,000 $32,000 -$2,500 $23,000 $32,000-$6,459 $34,000 $25,000 $88,345 3 (a) Identify all the simple investments. (b) Identify all the non-simple investments. (c) Compute the Internal Rate of Return (IRR) for each project using NPV method and Excel. Note the following: A simple (or conventional) investment is simply when one sign change occurs in the net cash flow series. If the...
The IRR evaluation method
assumes that cash flows from the project are reinvested at the same
rate equal to the IRR. However, in reality the reinvested cash
flows may not necessarily generate a return equal to the IRR. Thus,
the modified IRR approach makes a more reasonable assumption other
than the project’s IRR.
4. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $500,000. The project's expected cash flows are: Year Year 1...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment of $500,000. The project's expected cash flows are: Year...
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