Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Suppose your firm is considering investing in a project with the cash flows shown below, that the required
Time: | 0 | 1 | 2 | 3 | 4 | 5 |
Cash flow: | −$260,000 | $60,800 | $79,000 | $131,000 | $117,000 | $76,200 |
Use the MIRR decision rule to evaluate this project.
Expert Solution
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Step 1: Formula.
MIRR means Modified Internal rate of return.
It is calculated as follows:-
MIRR = - 1
where
FV = future value
PV = present value
n= time period
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