Question

27) Gore Global is considering the two mutually exclusive projects below. summarized below. The cash flows from the projects are ManBearPig Project Cash Flow Solar Car Cash Flow Y ear $100,000 $200,000 25,000 30,000 50,000 55,000 50,000 50,000 80,000 100,000 1 2 4 What is the ManBearPig Project's modified internal rate of return(MIRR) at a 10% cost of capital? А. 15.8% B. 13.0% C. 18.7% D. 14.6% E. 12.7%

Answer 1

Answer: Option A is correct.

Formula used by excel is MIRR(Values, finance_rate,reinvest_rate)

We have taken cost of capital (equal to 10%) as the finance rate and the reinvest rate.

Using the cash flows given in the question, we get the value of MIRR =15.76% or 15.8% (Rounded to one decimal place).

1 Year ManBearPig Project Cash Flow ($100,000) $25,000 $30,000 $50,000 $55,000 15.76% 8 7MIRR- Formula used MIRR(B2B6,10%,10%) 8