Question

20 Required information Part 2 of 3 ising campaign by a company that manufactures products that apply biometric, surveillance, and satellite A new advertisi technologies resulted in the cash flows shown. Cash Flow, $1000 2000 Year 10 points Skipped eBook Print external rate of return values using the MIRR approach with an investment rate of 30% and a borrowing rate of References 10% per year. The unique external rte of return value using the MiRR approach is %.

Answer 1

YEAR	CASH FLOW
0	2000
1	1200		Investment Rate	30%
2	-4000		Financing Rate	10%
3	-3000
4	2000
MIRR	17%	MIRR()

MIRR approach is the modified rate of return approach which takes into consideration the financing rate ( rate of interest for borrowing) and the re-investment rate of future cash-flows.

In excel the function asks for 3 inputs:

1) Cash Flows

2) Financing Rate - 10%

3) Investment Rate - 30%

SO, the External Rate of Return using MIRR approach is - 17%