Initial Cost = $70,125
Annual Cash Inflow = $9,000
Period of Project = 9 years
Cost of Capital = 14%
Future Value of Cash Inflows = $9,000*1.14^8 + $9,000*1.14^7 + …
+ $9,000*1.14 + $9,000
Future Value of Cash Inflows = $9,000 * (1.14^9 - 1) / 0.14
Future Value of Cash Inflows = $9,000 * 16.08535
Future Value of Cash Inflows = $144,768.15
MIRR = (Future Value of Cash Inflows / Initial Cost)^(1/n) -
1
MIRR = ($144,768.15 / $70,125)^(1/9) - 1
MIRR = 2.064430^(1/9) - 1
MIRR = 1.0839 - 1
MIRR = 0.0839 or 8.39%
So, MIRR of the project is 8.39%
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