Question
a). Find the total terminal value of the following cash flows when compounded at 15 per cent. Cash flows occur at annual intervals and the
a). Find the total terminal value of the following cash flows when compounded at 15 per cent. Cash flows occur at annual intervals and the fourth years cash flow is the last. Points in time (yearly intervals) T1 T2 T3 T4 Cash flow () + 200 + 300 + 250 + 400 b). If 900 is the initial cash outflow at time 0, calculate the compounding rate (i-e MIRR) that will equate the initial cash outflow with the terminal value as calculated in (a) above. c). You have calculated the modified internal rate of return (MIRR), now calculate the IRR for comparison.
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