Year |
0 |
1 |
2 |
3 |
Cash Flow |
-$750,000 |
$450,000 |
$200,000 |
$250,000 |
Given the cash flows and assuming the firm’s finance rate and reinvestment rate is 10%, what is the MIRR of the project?
Year 0 1 2 3 Cash Flow -$750,000 $450,000 $200,000 $250,000 Given the cash flows and...
Year Cash Flow Year 1 Year 2 Year 3 $275,000 -125,000 450,000 Year 4 450,000 Green Caterpillar Garden Supplies Inc.'s WACC is 8%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR): 19.52% 20.55% 18.50% 22.61% If Green Caterpillar Garden Supplies Inc.'s managers select projects based on the MIRR criterion, they should this independent project. Which of the following statements best describes the difference between the IRR method...
Mittuch Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 –$ 16,200 1 7,300 2 8,500 3 8,100 4 6,900 5 –4,300 The company uses an interest rate of 12 percent on all of its projects. Calculate the MIRR of the project using all three methods. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) MIRR Discounting approach % Reinvestment approach % Combination approach %
Yellow Day has a project with the following cash flows: Year Cash Flows 0 −$25,900 1 10,000 2 15,900 3 9,060 4 −3,050 What is the MIRR for this project using the reinvestment approach? The interest rate is 8 percent
Green Submarine has a project with the following cash flows: Year Cash Flows 0: −$17,500 1: 6,730 2: 11,600 3: 7,670 4: −2,700 The discounting rate is 7 percent and the reinvestment rate is 9 percent. What is the MIRR for this project using the combination approach?
A capital budgeting project has the following cash flows: Year Cash Flow 0 ($100) 1 $20 2 $40 3 $60 Assume that the firm's reinvestment rate and the cost of capital are both 10% What is the Modified Internal rate of Return of the project? a 11.28% b 8.63% c 10% d 7.79%
IBM is evaluating a project in Eutopia. The project will create the following cash flows: Year $ 0 -1,330,000 1 250,000 2 470,000 3 450,000 4 215,000 5 95,000 All cash flows will occur in Eutopia and are expressed in dollars. In an attempt to improve its economy, the Eutopia’s government has declared that all cash flows created by a foreign company are “blocked” and must be reinvested with the government for one year. The reinvestment rate for these funds...
4. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project’s IRR. Consider the following situation: Grey Fox Aviation Company is analyzing a project that requires an initial investment of $2,500,000. The...
Year 0 1 2 3 4 5 Cash Flow $-2,500,000 $425,000 $350,000 $275,000 $225,000 $2,625,000 Your real estate firm is considering the purchase of an office building. The space in the building will be leased to other companies and the building will be sold at the end of 5 years. Your firm’s weighted average cost of capital is 9.5%. Given the after-tax cash flows below, and assuming that cash flows are reinvested at the cost of capital, what is the...
A project has the following cash flows : Year Cash Flows 0 −$11,700 1 5,110 2 7,360 3 4,800 4 −1,640 Assuming the appropriate interest rate is 7 percent, what is the MIRR for this project using the discounting approach? Multiple Choice 17.95% 15.99% 11.65% 9.71% 13.71%
Green Submarine has a project with the following cash flows: Year Cash Flows −$18,150 1 7,380 2 13,550 3 8,190 4 −3,350 The discounting rate is 6 percent and the reinvestment rate is 8 percent. What is the MIRR for this project using the combination approach?