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Last month. Lloyd's Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project, the Federal
Last month. Lloyd's Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project, the Federal Reserve took actions that changed interest rates and therefore the firm's WACC. The Fed's action did not affect the forecasted cash flows. By how much did the change in the WACC affect the project's forecasted NPV? Note that a project's projected NPV can be negative in which case it should be rejected. Old WACC: 10.00% New WACC: 8.00% Year 0 1 2 3 Cash flows -$1,000 $410 $410 $410 $37.00 $38.48 $32.19 $40.70 $44.03 Ingram Electric Products is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected WACC: 9.75% Year 0 1 3 Cash flows -$800 $350 $350 $350 11.48% 10.57% 13.05% 15.00% O 14.35%
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