Question

Hindelang Inc. is considering a project that has the following cash flow and WACC data. What...

Hindelang Inc. is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Enter your answer rounded to two decimal places. Do not enter % in the answer box. For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box. WACC: 11% Year: 0 1 2 3 4 Cash flows: -$875 $350 $375 $400 $425

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

Let Cash flow for period n be CFn

WACC = r = 12.35%

Given,

CF0 = -875
CF1 = 350
CF2 = 375
CF3 = 400
CF4 = 425

MIRR = ( FVc / PVfc )1/n -1

where, FVc is the  future value of positive cash flows

and PVfc is the present value of negative cash flows

PVfc = 875

FVc = 350*1.12353 + 375*1.12352 + 400*1.1235 + 425 = 1844.09

=> MIRR = (1844.09/875)1/4 - 1 = 0.2049 = 20.49%

Add a comment
Know the answer?
Add Answer to:
Hindelang Inc. is considering a project that has the following cash flow and WACC data. What...
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