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1. DUULIUL LUI . ILUOPUITUJOUL. 5. A project will cost $95,000 today and there will be an additional cost in year 3 of $15,00

please show all the steps and formula

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Answer #1

Net cash flow each year = cash flow - cost.

MIRR is calculated using MIRR function in Excel.

MIRR is 10.97%.

f MIRR(D2:D6,14%,14%) D7 A. B C E Net Cash Cash Flow Flow (95,000) Cost 1 Year 95,000 2 0 1 30,000 30,000 2 50,000 50,000 (15

C 1 Year Cost Cash Flow Net Cash Flow 2 0 95000 C2-B2 3 1 30000 -С3-ВЗ 4 2 50000 -С4-B4 5 3 15000 0 C5-B5 6 4 50000 -Сб-В6 MI

The project should be rejected as the MIRR is lower than the discount rate.

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