9-11A. (MIRR calculation) Emily's Soccer Mania is considering building a new plant. This project would require an initial cash outlay of $1 0 million and will generate annual free cash inflows of $3 million per year for 10 years.

Calculate the project's MIRR, given:

a. A required rate of return of 10 percent

b. A required rate of return of 12 percent

c. A required rate of return of 14 percent In 2000, after a major investment and three years of development, Harley-Davidson introduced the Buell Blast. This fun-to-ride, sporty motorcycle was low-cost, lightweight, and aimed directly at 18- to 34-year-old Generation X-ers in the hopes of bringing a new generation ofcustomers into motorcycling. That's because Harley was facing a problem-its customer base was rapidly aging. In fact, over the past 10 years the average age of a Harley rider has risen from 38 to 46. In addition, Harley wanted to add more women to its customer base, and it accomplished this through its Buell motorcycle division. These smaller, sportier, less expensive motorcycles are more appropriate for less experienced motorcyclists. It is Harley's hope that once these new customers find the fun in motorcycling, they will eventuaUy graduate to Harleys.
Take a look at the Harley-Davidson Web site (www.harley-davidson.com). What type of customer do you think the Harley-Davidson motorcycles appeal to? Now find the Buell Motorcycle Company Web site (www.buell.com/en_us). What type of customer do these motorcycles appeal to? What do you think of Harley's strategy?