Use the MIRR decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 14P
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Suppose your firm is considering investing in a project with the cash flows
shown below, that the required rate of return on projects of this risk class is 7
percent, and that the maximum allowable payback and discounted payback
statistics for the project are 3.5 and 4.5 years, respectively.
Time:
Cash flow:
0
2
3
4
5
-$5,400 $1,600 $2,800 $2,000 $2,000 $1,800
Use the MIRR decision rule to evaluate this project. (Do not round
intermediate calculations and round your final answer to 2 decimal places.)
6
$1,600
Transcribed Image Text:Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: Cash flow: 0 2 3 4 5 -$5,400 $1,600 $2,800 $2,000 $2,000 $1,800 Use the MIRR decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) 6 $1,600
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