Cases in Financial Management:

FIN 600

Case 7: Estimate the project's operating cash flows. (Hint: Again use Table 1 as a guide.) What arethe project's NPV, IRR, modified IRR (MIRR), and payback? Should the project be under-taken? [Remember: The MIRR is found in three steps: (1) compound all cash inflows for-ward to the terminal year at the cost of capital, (2) sum the compounded cash inflows toobtain the terminal value of the inflows, and (3) find the discount rate which forces the pre-sent value of the terminal value to equal the present value of the net investment outlays. Thisdiscount rate is defined as the MIRR.]Case:14Cash Flow Estimation