Question: The down payment or equity needed for this investment is $50,000 (outflow) N Cash Flow 1 $12,000 Savings Rate is: 2% and Loan Rate is

The down payment or equity needed for this investment is $50,000 (outflow)

N Cash Flow

1 $12,000 Savings Rate is: 2% and Loan Rate is 8%

2 4,000

3 -3,500

4 6,000

Sale 4 $35,000

Calculate the adjustment rate to use for MIRR:

a. Do MIRR for the above example:

b. Partition and do Duration using the MIRR rate for the chart below:

N Cash Flow Present Value N N*PV

c. Complete the Risk Chart below:

Reference Case Less Risk More Risk

MIRR _______ __________ _________

%CF ________ __________ _________

%Sale ________ __________ _________

Duration_______ __________ _________

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