Question
Cummings Products Company is considering the following investment. The projects expected cash flows are as follows: Year Cash flow 0 -$3,000 1 -3,870 2 -1,930
Cummings Products Company is considering the following investment. The projects expected cash flows are as follows:
| Year | Cash flow |
| 0 | -$3,000 |
| 1 | -3,870 |
| 2 | -1,930 |
| 3 | 6,000 |
| 4 | 6,000 |
| 5 | -11,000 |
| 6 | 8,500 |
| 7 | 2,800 |
| 8 | -5,000 |
1. Assume a discount rate of 15 percent. What is the PV of all cash outflows?
2. Assume a discount rate of 15 percent. What is the FV of all cash inflows?
3. Assume a discount rate of 15 percent. What is the project's MIRR?
4. should this project be accepted based solely on the MIRR rule?
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Business Finance
Authors: Ronald R. Pitfield
1st Edition
0852581513, 978-0852581513
