Youve just learned that the analyst who assembled the projects projected cash flow information used above didnt
Question:
Youve just learned that the analyst who assembled the projects projected cash flow information used above didnt know his inflows from his outflows. Youve reexamined the source data and determined that the revised annual cash flow information should be:
Year | Cash Flow |
0 | -$998,750 |
1 | 275,000 |
2 | -300,000 |
3 | 360,000 |
4 | 240,000 |
Again, if Trents desired rate of return is 6.00%, then the projects revised modified internal rate of return (MIRR) should be-9.37% -7.98,-6.94,- 6.59. (Hint: Round all dollar amounts to the nearest whole dollar, and your final MIRR value to two decimal places.)
If, again, Trents managers continue to exhibit their general conservatism and select their investment projects based only on the projects MIRR, should they accept the project?
Auditing A Practical Approach
ISBN: 9780730382645
4th Edition
Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton