Question

Hello,

20. MIRR Solo Corp. is evaluating a project with the following cash flows: Year Cash Flow U AWNO -$47.000 16,900 20,300 25,800 19,600 - 9.500 The company uses a discount rate of 10 percent on all of its projects. Calculate the MIRR of the project using all three methods. 21. MIRR Suppose the company in the previous problem uses a discount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects. Calculate the MIRR of the project using these rates for all three methods.

Could I please inquire assistance with questions #21 please?

Thank you,

Answer 1

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04:39 E ENG 12 196 24-01-2020 fr SS67 Formula Bar SJ SG SH SI SK SL SM SN SO SP SQ SR SU эт 58 (a) MIRR USING DISCOUNTING APPROACH HERE WE HAVE TO CALCULATE PV OF ALL CASHOUTFLOWS AT T=0, discount at 11% 59 CASH OUTFLOW AT T=0 = -47000 + (-9500)/(1.11)^5 CASH OUTFLOW AT T=0 = -52637.79 60 61 62 YEAR 63 CFAT 64 -52637.79 65 1. 16900 66 2 20300 67 25800 68 19600 69 70 [=IRR(SM64:SM69)] 19.93% 71 MIRR = IRR = 72 73 (b) MIRR USING REINVESTMENT APPROACH WE HAVE TO CALCULATE FUTURE VALUE OF ALL CASH FLOWS 74 75 THAT IS = 16900 (1.08)^4 + 20300(1.08)^3 + 25800(1.08)^2 + 19600(1.08)^1 + (-9500) 76 FV OF ALL CASH FLOWS = 16900 (1.08)^4 + 20300(1.08)^3 + 25800(1.08)^2 + 19600(1.08)^1 + (-9500) 77 FV OF ALL CASH FLOWS = 90325.54 CASH OUTFLOW = 78 47000 79 80 MIRR = 13.96% RATE(5,,-47000,90325.54) STEIN indiffEPS EBIT HPR GMAM REPLACEMENT BOND MI-np-ir REPLACEMENTS EAC MACRS NPV RELEVANT BETA LEVERED OPTION TO WAIT LI .. O

04:40 G x E ENG 12 196 24-01-2020 fr SK93 Formula Bar SG SH SI SJ SK SL SM SN SP SQ SR ST SU 82 (c) 83 MIRR USING COMBINATION APPROACH 84 YEAR CFAT 85 -47000 86 16900 87 20300 88 25800 19600 89 4 90 -9500 91 [=MIRR(SM85:SM90,11%,8%)] MIRR 13.66% 92 93 94 95 96 97 98 99 100 101 102 103 104 STEIN indiffEPS EBIT LI . O MI-np-ir REPLACEMENT S HPR GMAM EAC MACRS NPV RELEVANT BETA LEVERED REPLACEMENT BOND OPTION TO WAIT