Suppose your firm is considering investing in a project with the cash flows shown below, that the
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Question:
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively.
Time: | 0 | 1 | 2 | 3 | 4 | 5 |
---|---|---|---|---|---|---|
Cash flow: | −$245,000 | $66,800 | $85,000 | $142,000 | $123,000 | $82,200 |
Use the MIRR decision rule to evaluate this project.
Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
MIRR____________ %
Should it be accepted or rejected?
Related Book For
Finance Applications and Theory
ISBN: 978-0077861681
3rd edition
Authors: Marcia Cornett, Troy Adair
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