Question

Score: 0 of 1 pt 7 of 9 (4 complete) HW Score: 44.44%, 4 of 9 pts pg-16 (similar to) Quesation Help MIRR unequal Itves. Singing Fish Fine Foods has $1,880,000 for capital investments this year and is considering two potential projects for the funds. Project 1 is updating the store's deli section for additional food service. The estimated after-tax cash flow of this project is 5610,000 per year for the next five years. Project 2 is updating the stores wine section. The estimated annual after-tax cash flow for this project is 5530,000 for he next six years. The appropriate discount rate for the dell expansion s 9.4% and the appropriate discount rate for the wine section is 8.8%. What are the Mi Rs forthe Singing Fish Fine Foods projects? What are the MIRRs when you adjust for unequal lives? Do the MIRR adjusted for unequal lives change the decision based on MIRRs? Hint: Take all cash flows to the same ending period as the longest project If the appropriate reinvestment rate for the deli expansion is 9.4%, what is the MIRR of tho deli expansion? % (Round to two decimal places.)

Answer 1

10 Year Cash Flow 11 0 $-18,80,000.00 12 1$6,10,000.00 13 2 $ 6,10,000.00 14 3 $ 6,10,000.00 15 4 $ 6,10,000.00 16 5 $ 6,10,000.00 17 MIRR

10 Year Cash Flow C) -1880000 610000 13 2610000 610000 610000 610000 12 1 14 3 15 4 16 5 17|MIRR |-MIRR(B11:B163.4%,9.4%)