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Trinity has a project costing $1,500,000 that will have the following after tax cash flows in years 1-5: 600,000, -100,0...

Trinity has a project costing $1,500,000 that will have the following after tax cash flows in years 1-5: 600,000, -100,000, 800,000, -100,000, 500,000. If the WACC is 8.75%, find the MIRR and NPV.

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Answer #1

Hello Sir/ Mam

(a)

MIRR

Financing rate 8.75 % Reinvestment rate 8.75 % Initial investment 1,500,000 ? Annual cash flows Cash flow - year 1 600,000 7

(b)

Time Cashflows PVF PV
0 -$15,00,000.00 1 -$15,00,000.00
1 $6,00,000.00 0.91954023 $5,51,724.14
2 -$1,00,000.00 0.845554234 -$84,555.42
3 $8,00,000.00 0.777521135 $6,22,016.91
4 -$1,00,000.00 0.714961963 -$71,496.20
5 $5,00,000.00 0.657436288 $3,28,718.14
NPV -$1,53,592.43

I hope this solves your doubt.

Feel free to comment if you still have any query or need something else. I'll help asap.

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