Question

A project has an initial cost of $38,550, expected net cash inflows of $10,000 per year...

A project has an initial cost of $38,550, expected net cash inflows of $10,000 per year for 8 years, and a cost of capital of 10%. What is the project's MIRR? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.

*Please show how to calculate MIRR with BA II Plus*

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Initial Cost = $ 38500, Expected Net Cash Inflows = $ 10000, Tenure = 8 years and Interest Rate = Cost of Capital = 10 %

Solving the problem using a BA II Plus:

- Input: PMT = $ 10000, N = 8 years , I/Y = 10 %, PV = 0

- CMPT -> FV

- FV = $ 114358.88

- PV = Initial Cost = $ 38500

- MIRR = [FV/PV]^(1/N) - 1 = [114358.88 / 38500]^(1/8) - 1 = 0.14578 or 14.578 % ~ 14.58 %

Add a comment
Know the answer?
Add Answer to:
A project has an initial cost of $38,550, expected net cash inflows of $10,000 per year...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT