Question

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively.

Time:	0	1	2	3	4	5
Cash flow:	–$280,000	$48,800	$67,000	$107,000	$105,000	$64,200

MIRR=_____%   (round your final answer to 2 decimal places.)

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 13 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively.

Time:	0	1	2	3	4	5
Cash flow:	–$365,000	$64,800	$83,000	$140,000	$121,000	$80,200

NPV=__?

Answer 1

Time:	0	1	2	3	4	5
Cash flow:	-280000	$48,800	$67,000	$107,000	$105,000	$64,200
MIRR = Using MIRR function in MS excel	MIRR(G3387:L3387,12%,12%)	11.70%
Time:	0	1	2	3	4	5
Cash flow:	-365000	$64,800	$83,000	$140,000	$121,000	$80,200
present value factor at 13% =1/(1+r)^n r = 13%	1	0.884955752	0.78314668	0.6930502	0.613319	0.54275994
present value of cash flow = cash flow*PVF at 13%	-365000	57345.13274	65001.1747	97027.023	74211.57	43529.3469
NPV = sum of present value of cash flow	-27885.76

C. - = New Microsoft Office Excel Worksheet - Microsoft Excel Page Layout Formulas Data Review View Percentage AutoSum" A Home Insert * Cut La Copy Format Painter Clipboard H3388 Calibri B I Wrap Text Merge & Center - D Cell Styles :- 3 Insert Delete Format Paste $ - % , 8.09 Conditional Format Formatting as Table Styles 2 Clear - 11 - A A Dr U - - > A E EFF Font Alignment foc =MIRR(G3387:L3387,12%,12%) H Sort & Filter Editing Find & Select Number Cells F I J K L M N O P Q R S T 3384 3385 3386 11 $48,800 21 $67,000 3387 $107,000 $105,000 $64.200 Time: 0 Cash flow: -2800000 MIRR = Using MIRR function in MIRR(G3387:L3387,12%, MS excel 12%) 11.70% 3388 3389 3390 3391 Time: Cash flow: -365000 $64,800 $83,000 $140,000 $121,000 $80.200 3392 0.884955752 0.78314668 0.6930502 0.613319 0.54275994 present value factor at 13% =1/(1+r)^n r = 13% present value of cash flow = cash flow*PVF at 13% NPV = sum of present value of cash flow 3393 -365000 57345.13274 65001.1747 97027.023 74211.57 43529.3469 -27885.76 3394 3395 3396 3397 3398 3399 3400 Sheet22 Sheet23 Sheet24 Sheet25 Sheet26 Sheet27 Sheet28 Sheet29 Dade Circular Dafarancas FAM 1000