Gentle Ben Corp decides they want to invest in a new equipment to expand their production...

 

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Gentle Ben Corp decides they want to invest in a new equipment to expand their production of cleaning products. Here are the cashflows for the project: -230,000 upfront payment in period 0, $100,000 inflows for periods 1 and 2, -$50,000 outflow in period 3 and $80,000 inflows in periods 4 and 5. Assume the Discount rate is 12.0% and the Reinvestment Rate is 4%. Delieverable: FIRST (#1): Please model the original (given) Project cash flows in a timeline ('Project CashFlows'). Then model a second set of MODIFIED cashflows for the purpose of calculating MIRR= one negative, upfront cash flow and one, positive, future value lump sum cash flow. NEXT (#2): After you model all of the cash flows below (original project and modified); calculate the MIRR using 3 methods listed below. Your answer should be: 8.134% | Refer back to your notes and video as needed. Original Cashflow Project Cashflows PV of Outflows FV of Inflows Modified Cash Flows Outflows Inflows Total Modified Cash Flow MIRR Calcs: discount rate reinvestment rate 0 0 12.00% 4.00% 1 0 2 0 3 0 4 0 5 0 Using Return Formula Using =MIRR() Excel Formula with 'Total Modified Cash Flow' Using =MIRR() Excel Formula with 'Project Cash Flows' Gentle Ben Corp decides they want to invest in a new equipment to expand their production of cleaning products. Here are the cashflows for the project: -230,000 upfront payment in period 0, $100,000 inflows for periods 1 and 2, -$50,000 outflow in period 3 and $80,000 inflows in periods 4 and 5. Assume the Discount rate is 12.0% and the Reinvestment Rate is 4%. Delieverable: FIRST (#1): Please model the original (given) Project cash flows in a timeline ('Project CashFlows'). Then model a second set of MODIFIED cashflows for the purpose of calculating MIRR= one negative, upfront cash flow and one, positive, future value lump sum cash flow. NEXT (#2): After you model all of the cash flows below (original project and modified); calculate the MIRR using 3 methods listed below. Your answer should be: 8.134% | Refer back to your notes and video as needed. Original Cashflow Project Cashflows PV of Outflows FV of Inflows Modified Cash Flows Outflows Inflows Total Modified Cash Flow MIRR Calcs: discount rate reinvestment rate 0 0 12.00% 4.00% 1 0 2 0 3 0 4 0 5 0 Using Return Formula Using =MIRR() Excel Formula with 'Total Modified Cash Flow' Using =MIRR() Excel Formula with 'Project Cash Flows'

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It appears you are looking to calculate the Modified Internal Rate of Return MIRR for a project based on given cash flows using three different method... View the full answer