Question
Bonnie has the opportunity to purchase a large Victorian home for $555,400. She will need to spend additional $142,920 to renovate and convert to a
Bonnie has the opportunity to purchase a large Victorian home for $555,400. She will need to spend additional $142,920 to renovate and convert to a bed and breakfast. She estimates the following after tax cashflows. Year 6 cashflow includes the terminal value of the venture. What is the Modified Internal Rate of Return (MIRR) of the venture if Bonnie's cost of capital is 11% (round to 2 decimal places).
| Year | Cash-flows |
| 1 | 84,893 |
| 2 | 96,232 |
| 3 | 114,919 |
| 4 | 134,060 |
| 5 | 141,292 |
| 6 | 992,749 |
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ACCA Advanced Audit And Assurance
Authors: Nick Blackwell, Annabel Lefton, Emile Woolf International
1st Edition
1848434715, 978-1848434714
