Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $3,225,000. The project's expected cash flows are: Year Cash Flow Year 1 $375,000 Year 2 -125,000 Year 3 500,000 Year 4 400,000 If the company's WACC is 8% and the project has the same risk as the firm's average project, what is the project's modified internal rate of return (MIRR)? Should you accept or reject this project?
Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $3,225,000. The project's expected cash flows are: Year Cash Flow Year 1 $375,000 Year 2 -125,000 Year 3 500,000 Year 4 400,000 If the company's WACC is 8% and the project has the same risk as the firm's average project, what is the project's modified internal rate of return (MIRR)? Should you accept or reject this project?
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 20P
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Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $3,225,000. The project's expected cash flows are:
Year | Cash Flow |
Year 1 | $375,000 |
Year 2 | -125,000 |
Year 3 | 500,000 |
Year 4 | 400,000 |
If the company's WACC is 8% and the project has the same risk as the firm's average project, what is the project's modified
Should you accept or reject this project?
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