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1-15. (Calculating MIRR) OTR Trucking runs a fleet of long-haul trucks and has recently expanded into the Midwest, where it has decided to build a
1-15. (Calculating MIRR) OTR Trucking runs a fleet of long-haul trucks and has recently expanded into the Midwest, where it has decided to build a maintenance facility. This project will require an initial cash outlay of $20 million and will generate annual cash inflows of $4.5 million per year for Years 1 through 3 . In Year 4, the project will provide a net negative cash flow of $5,000,000 due to anticipated expansion of and repairs to the facility. During Years 5 through 10 , the project will provide cash inflows of $2 million per year. a. Calculate the project's NPV and IRR where the discount rate is 12 percent. Is the project a worthwhile investment based on these two measures? Why or why not? b. Calculate the project's MIRR. Is the project a worthwhile investment based on this measure? Why or why not
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