Solo Corp. is evaluating a project with the following cash flows: Cash Flow 0 29,500 11,700 14,400 16,300 13,400 9,900 Year 1 2 134 5 The company uses a discount rate of 13 percent and a reinvestment rate of 6 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b.Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Solo Corp. is evaluating a project with the following cash
flows:
Year
Cash
Flow
0 29,500
1
11,700
2
14,400
3
16,300
4
13,400
5
9,900
The company uses a discount rate of 13 percent and
a reinvestment rate of 6 percent on all of its projects.
a. Calculate the MIRR of the project using the discounting
approach. (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal
places, e.g., 32.16.)
b.Calculate the MIRR of the project using the reinvestment
approach. (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal
places, e.g., 32.16.)
c. Calculate the MIRR of the project using the combination
approach. (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal
places, e.g., 32.16.)
a. Discounting approach MIRR
b. Reinvestment approach MIRR
C. Combination approach MIRR
%
%
%
Transcribed Image Text:Solo Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 29,500 1 11,700 2 14,400 3 16,300 4 13,400 5 9,900 The company uses a discount rate of 13 percent and a reinvestment rate of 6 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b.Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR C. Combination approach MIRR % % %
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