Question: Project X has a cost of capital of 8 percent

Project X has a cost of capital of 8 percent and the following cash flows: investment of $10,000 in year 0, cash inflows of $5,000, $ 3,000, and $4,000 in years 1, 2, and 3.
a. What is the IRR? What is the assumption of IRR on reinvesting cash?
b. Suppose the cash is deposited in an account with a 2% annual interest rate. What is the MIRR?
c. Suppose the cash is deposited in an account with a 8% annual interest rate. What is the MIRR?
d. Suppose the cash is deposited in an account with a 10.179% annual interest rate. What is the MIRR?


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  • CreatedFebruary 25, 2015
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