2. the the foltowing table or natiate inveh values you thould enter to compite the fiture value of the NiV. Featiy, you tan aryine the questise the Misse for the projeit maximues atafefoliser value. Now its time for you to practice what you've learned. Suppose a frrti it carsidering two mutusily exidustive equaly risky projects wat waCC =10% and the following cash foms: What is the Miak of the project thot maximires the shaceholder return? 15.75% 15.904 19.170 21.53% Suppose a firm is considering two mutually exclusive equally risky projects with WACC =10% and the following cash flows: How can you calculate the MIRR for the project that maximizes shareholder value? Assuming that your professional financial calculator is able to calculate the MIRR, use the following table to indicate which values you should enter to compute the MIRR for Project x. 2. Use the folliowing table to hdiate which values you should enter to compute the future value of the NPV. 3. Use the following tabie to indicate which values you should enter to compute the MIRR. Finally, you can answer the question: The MIRR for the project maximizes shareholder value. According to the video, the modified internel rate of return (MiRR) - is generally a better indicator of a project's true profitability. Follow these steps describing how the MIRR is calculated to complete the tabie for froject x. - The Project x has just one outfow: $1,000 at t=0, this means that it is not discounted and its PV=$1,000. (Note: If the project has more than one outflow, you need to find the PV at t=0 for each one and sum them to arrive at the PV of total costs for use in the MiRR calculation.) - You need to find the future value of each inflow compounded at the WACC out to the terminal year, which is the year the last inflow is recelved. (Hint: Assume that cash flows are reinvested at the WACC.) - You have the cost at t=0,$1,000, and the FV. There is some discount rate that will cause the PV of the terminal value to equal the cost. That interest rate is defined as the MIRR. (Note: Using your financial calculator, enter N=4,PV=1,000,PMT=0, and FV. Then when you press the I/YR key, you get the MIRR. Some calculators have a bullt-in MIRR function that streamines the process. In Excel, you can use either the RATE function or MIRR function to calculate the MIRR.) - You need to find the future value of each inflow compounded at the WACC out to the terminal year, which is the year the last inflow is recelved. (Hint: Assume that cash flows are reinvested at the WACC.) - You have the cost at t=0,$1,000, and the FV. There is some discount rate that will cause the PV of the terminal value to equal the cost. That interest rate is defined as the MIRR. (Note: Using your finsncial calculator, enter N=4,PV=1,000,PMT=0, and FV. Then when you press the IIXR key, you get the MIRR. Some calculators have a bullt-in MIRR function that streamilines the process. In Excel, you can use elther the RATE function or MIRR function to calculate the MIRR.) Complete the following table. Suppose a firm is considering two mutually exclusive equally risky projects with WACC =10% and the following cash flows: How can you calculate the MIRR for the project that maximizes shareholder value? Assuming that your professional financial calculator is able to caiculate the MiRR, use the following table to indicate which values you should enter to compute the MIRR for Project X. Suppose that your calculator does not have the ability to compute the MIRR. Here are the steps you need to take to calculate the MIRR for Project 2. Use the foliowing table to indicate which values you should enter to compute the future value of the NPV. 3. Use the following table to indicate which values you should enter to campute the MiRk. Fnally, you can answer the question: The Maks for the project; maximitres shareholder value