Question

when entering units, use % for percentages. S for dollar amounts, and von Tory. Question 5 (4 points) Project C has a 13 percent cost of capital and the following cash flows: Year Cash Flow -500 145 115 600 450 3 The project's modified internal rate of return (MIRR) is: Your Answer Answer units Save Previous Page Next Page Save All Responses Go to Submit Quiz DOLL

Answer 1

MIRR = 31.88%

Modified internal rate of return aka MIRR assumes that cash inflows are reinvested at the firm's cost of capital, and the initial outlays are financed at the firm's financing cost. Opposte to this, the traditional IRR assumes the cash flows from a project are reinvested at the IRR.

2 Year 3 0 Cashflow 500 145 115 9 10.15 9 Cost of Capital 14) 11 MIRR MIRR(B3:B7,B9,B9)