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Problem 10-03 MIRR A project has an initial cost of $54,750, expected net cash inflows of...

Problem 10-03
MIRR

A project has an initial cost of $54,750, expected net cash inflows of $13,000 per year for 6 years, and a cost of capital of 8%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.

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Answer #1
Present value of net cash outflows = 54750
Year Cash Flow FV at 8% Future Value
1 13000      1.4693        19,101.26
2 13000      1.3605        17,686.36
3 13000      1.2597        16,376.26
4 13000      1.1664        15,163.20
5 13000      1.0800        14,040.00
6 13000      1.0000        13,000.00
Total FV of net cash inflows        95,367.08
MIRR = (FV of net cash inflows/PV of net cash outflows)^(1/n)-1
MIRR = (95367.08/54750)^(1/6)-1
MIRR = 9.69%
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