Will Project A be recommended? The cost of capital is 20%. Year Project A 0 -$75,000...

Question

Question

Will Project A be recommended? The cost of capital is 20%.

Year Project A 0 -$75,000 1 $32,400 2 $30, 200 3 $36,600

1) NO! Project A has MIRR of 9.55% 2) YES! Project A has MIRR of 13.98% 3) Yes! Project A has MIRR of 29.40% 4) No! Project A has MIRR of 16.79%

business finance

Answer 1

Answer #1

The correct answer is option D i.e. No! Project A has MIRR of 16.79%

А 1 Year 20 3 1 4 2 5 3 6 MIRR Project A -75000 32400 30200 36600 =MIRR(B2:B5,20%,20%) 8

Thumbs up please! Thank You

Answer 2

Similar Homework Help Questions

If the cost of capital is 10%, what is the MIRR of this project and should...

If the cost of capital is 10%, what is the MIRR of this project and should be accepted or rejected? Year 0 1 2 3 4 5 6 Cash Flow -$1000 200 400 600 600 200 600 6.76%, reject 20.87%, accept 21.72%, accept 32.12%, accept None of the above
Must for excel formula for MIRR Expected Net Cash Flows Time Project A Project B 0...

Must for excel formula for MIRR Expected Net Cash Flows Time Project A Project B 0 ($375) ($575) 1 ($300) $190 2 ($200) $190 3 ($100) $190 4 $600 $190 5 $600 $190 6 $926 $190 7 ($200) $0 e. What is each project's MIRR at a cost of capital of 12%? At r = 18%? Hint: note that B is a 6-year project. @ 12% cost of capital @ 18% cost of capital MIRR A = MIRR A = MIRR B...
Given a project with the following cash flows and a cost of capital of 9%. Calculate...

Given a project with the following cash flows and a cost of capital of 9%. Calculate the NPV, IRR, MIRR, and PI. For each of the four calculations, give a brief interpretation of what it measures and how it should be used to evaluate a project. Should the project be accepted? Why or why not? Time Period Cash Flow 0 -$200,000 1 $50,000 2 $70,000 3 -$80,000 4 $75,000 5 $100,000 6 $120,000...

Canal Authority is evaluating a new project and has estimated the following cash flows: Year 0...

Canal Authority is evaluating a new project and has estimated the following cash flows: Year 0 = -$2,478,000 Year 1 = $1,389,000 Year 2 = $1,076,000 Year 3 = $876,000 Canal Authority’s cost of capital is 12%. Calculate the following: 1. NPV 2. IRR 3. MIRR 4. Indicate whether the Canal Authority should accept or reject this project.
Project X can be selected for the capital budget, because: Project X 0 -100 1 40...

Project X can be selected for the capital budget, because: Project X 0 -100 1 40 2 30 3 50 4 50 5 -40 Initial investment capital cost is 12% tiene un IRR de 14.44% tiene un PI de 0.90 tiene un MIRR de 12.77% tiene un NPV de -$450.00 No se puede determinar con la información provista
Compute the MIRR statistic for Project lif the appropriate cost of capital is 12 percent. (Do...

Compute the MIRR statistic for Project lif the appropriate cost of capital is 12 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project I Time: Cash flow: 0 -$11,300 1 $5,480 2 $4,330 3 $1,670 4 $2,150 MIRR % Should the project be accepted or rejected? rejected accepted

A firm with a 9 percent cost of capital is considering a project for this year’s...

A firm with a 9 percent cost of capital is considering a project for this year’s capital budget. The project’s expected after-tax cash flows are as follows: Year: 0 1 2 3 4 Cash flow: -$15,000 $5,700 $4,700 $6,900 $6,800 Calculate the project’s modified internal rate of return (MIRR). a. 60.67% b. 20.96% c. 28.87% d. 16.14% e. 12.59%
b Your firm is considering a project that will cost $4.499 million up front, generate cash...

b Your firm is considering a project that will cost $4.499 million up front, generate cash flows of $3.49 milion per year for 3 years, and then have a cleanup and shutdown cost of $6.03 million in the fourth year. 2. How many IRRS does this project have? b. Calculate a modified IRR for this project assuming a discount and compounding rate of 9.5% c. Using the MIRR and a cost of capital of 9.5%, would you take the project?...
A capital budgeting project has the following cash flows: Year Cash Flow 0 ($100) 1 $20 2...

A capital budgeting project has the following cash flows: Year Cash Flow 0 ($100) 1 $20 2 $40 3 $60 Assume that the firm's reinvestment rate and the cost of capital are both 10% What is the Modified Internal rate of Return of the project? a 11.28% b 8.63% c 10% d 7.79%

The following are the cash flows of two projects: Year Project A Project B 0 −$...

The following are the cash flows of two projects: Year Project A Project B 0 −$ 300 −$ 300 1 180 200 2 180 200 3 180 200 4 180 If the opportunity cost of capital is 12%, what is the profitability index for each project?