Problem $10\mathrm{.}22-$ Modified Internal Rate of Return $($MIRR$)$ Student Work Area

PROBLEM Required: Provide input into cells shaded in gray in this template.

Morningside Bakeries recently purchased equipment at a cost of $$650,000.$ Management expects the equipment to generate cash flows of $$275,000$ in each of the next four years. The cost of capital is $14$ percent. Use the FV function with cell references to the Problem area in order to calculate the terminal value of cash flows. Use the Rate function with cell references to the Problem area and Student Work area to calculate the MIRR. Do not leave any portion of the formula for the functions blank $-$ use $0\text{'}$s when necessary. Be sure to represent cash inflows as positive values.

PV of Costs $$650,000\mathrm{.}00$

Length of Project $4$ years

Cost of Capital $14\%$

Annual Cash Flows $$275,000\mathrm{.}00$ What is the terminal cash flow for this project?

Terminal cash flow

What is the MIRR for this project?

MIRR