Question

1. A project has an initial cost of $45,725, expected net cash inflows of $10,000 per year for 8 years, and a cost of capital of 14%. What is the project's MIRR?

2. Your division is considering two investment projects, each of which requires an up-front expenditure of $17 million. You estimate that the investments will produce the following net cash flows:

Year	Project A	Project B
1	$  6,000,000	$20,000,000
2	10,000,000	10,000,000
3	20,000,000	7,000,000

1. What are the two projects' net present values, assuming the cost of capital is 5%? Round your answers to the nearest dollar.
   Project A $ =
   Project B $ =
   
   What are the two projects' net present values, assuming the cost of capital is 10%? Round your answers to the nearest dollar.
   Project A $ =
   Project B $ =
   
   What are the two projects' net present values, assuming the cost of capital is 15%? Round your answers to the nearest dollar.
   Project A $ =
   Project B $ =
   
2. What are the two projects' IRRs at these same costs of capital? Round your answers to two decimal places.
   Project A =___%
   Project B =___ %

Answer 1

1)

C202 - X V fx =MIRR(C192:C200,14%,14%) ДА B Year 191 192 193 194 195 196 197 198 199 0 $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ 7 $ C Cash flows (45,725) 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 200 201 202 MIRR 14.21%

Function Arguments ? X MIRR Values Finance_rate Reinvest rate C192:C200 14% 14% = = {-45725;10000;10000;10000;10000;10000;10000;10 0.14 0.14 1 = = 0.142055188 Returns the internal rate of return for a series of periodic cash flows, considering both cost of investment and interest on reinvestment of cash. Reinvest_rate is the interest rate you receive on the cash flows as you reinvest them. Formula result = 14.21% Help on this function D OK Cancel

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