Suppose the company in the previous problem uses a discount rate of 11 percent and a reinvestment

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Suppose the company in the previous problem uses a discount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects. Calculate the MIRR of the project using all three methods with these rates.

In the previous problem

Chamberlain Corp. is evaluating a project with the following cash flows:

Year ________________Cash Flow

0 ............................. -$19,500

1 ................................. 7,930

2 ................................. 9,490

3 ................................. 8,970

4 ................................. 7,210

5 ................................ -3,980

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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Essentials of Corporate Finance

ISBN: 978-0078034756

8th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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