Homework Answers
IRR is the rate at which PV of Cash Inflows are equal to PV of Cash Outflows
Project M:
| Year | CF | PVF @12% | Disc CF | PVF @13% | Disc CF |
| 0 | $ -18,00,000.00 | 1.0000 | $ -18,00,000.00 | 1.0000 | $ -18,00,000.00 |
| 1 | $ 5,00,000.00 | 0.8929 | $ 4,46,428.57 | 0.8850 | $ 4,42,477.88 |
| 2 | $ 5,00,000.00 | 0.7972 | $ 3,98,596.94 | 0.7831 | $ 3,91,573.34 |
| 3 | $ 5,00,000.00 | 0.7118 | $ 3,55,890.12 | 0.6931 | $ 3,46,525.08 |
| 4 | $ 5,00,000.00 | 0.6355 | $ 3,17,759.04 | 0.6133 | $ 3,06,659.36 |
| 5 | $ 5,00,000.00 | 0.5674 | $ 2,83,713.43 | 0.5428 | $ 2,71,379.97 |
| NPV | $ 2,388.10 | $ -41,384.37 | |||
IRR = Rate at which least +ve NPV + [ NPV at that Rate / Change in NPV due to 1% inc in Disc Rate ] * 1%
= 12% + [ 2388.10 / 43772.47 ] * 1%
= 12% + 0.05%
= 12.05%
IRR of Project M is 12.05%
Pls comment, if any further assistance is required.
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Need help solving all parts thanks. Please show how answer was
found.
Internal rate of return and modified internal rate of return. Quark Industries has three potential projects, all with an initial cost of $2 200,000. Given the discount rate and the future cash fow of each project, what are the IRRs and MIRRs of the three projects for Quark Industries? M Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5 Discount rate $600,000 $800,000 $800,000 $600,000...
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All I need help with on this question is the MIRR for all three projects. I...
All I need help with on this question is the MIRR for all three
projects. I have tried both excel and handwriting and can't seem to
get it right, so this is my last attempt. Thank you!
Since the picture seems hard to see: The values for Project M
are 400,000 years 1-5, N is 600,000 years 1-5, and O is 900,000
(Y1), 700,000 (Y2), 500,000 (Y3), 300,000 (Y4), and 100,000 (Y5).
The discount rate for M is 8%, N...
. 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...
4. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from...
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 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 $2,500,000. The project's...
8. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from...
8. 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: Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment of $3,225,000....
Internal rate of return and
modified internal rate of return. Quark Industries has three
potential projects, all with an initial cost of $2,300,000. Given
the discount rate and the future cash flow of each project in the
following table, what are the IRRs and MIRRs of the three projects
for Quark Industries? What is the IRR for project M?
Project N $800,000 Project M Project O Cash Flow Year 1 $600,000 $1,200,000 $1,000,000 Year 2 $600,000 $800,000 $600,000 $800,000 $800,000...
P9-13 (similar to) Question Help • Internal rate of return and modified internal rate of return. Quark Industries has three potential projects, all with an initial cost of $1,900,000. Given the discount rate and the future cash flow of each project in the following table, , what are the IRRs and MIRRs of the three projects for Quark Industries? What is the IRR for project M? 0 Data Table % (Round to two decimal places.) (Click on the following icon...
Need help solving all parts thanks. Please show how answer was
found.
Internal rate of return and modified internal rate of return. Quark Industries has three potential projects, all with an initial cost of $2 200,000. Given the discount rate and the future cash fow of each project, what are the IRRs and MIRRs of the three projects for Quark Industries? M Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5 Discount rate $600,000 $800,000 $800,000 $600,000...
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5. Quark Industries has four potential projects, all with an initial cost of $2,000,000. The capital budget for the year will allow Quark Industries to accept only one of the four projects. Given the discount rates and the future cash flows of each project, determine which project Quark should accept Cash Flow Year 1 Year 2 Year 3 Project M $500,000 $500,000 $500,000 $500,000 $500,000 6% Project N $600,000 $600,000 $600,000 $600,000 $600,000 9% Project $1,000,000 $ 800,000 $ 600,000...
All I need help with on this question is the MIRR for all three
projects. I have tried both excel and handwriting and can't seem to
get it right, so this is my last attempt. Thank you!
Since the picture seems hard to see: The values for Project M
are 400,000 years 1-5, N is 600,000 years 1-5, and O is 900,000
(Y1), 700,000 (Y2), 500,000 (Y3), 300,000 (Y4), and 100,000 (Y5).
The discount rate for M is 8%, N...
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 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 $2,500,000. The project's...
8. 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: Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment of $3,225,000....
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