Question
Slow Ride Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 $12,800 1 6,200 2 6,800 3 6,300 4 5,200
Slow Ride Corp. is evaluating a project with the following cash flows: |
Year | Cash Flow |
0 | $12,800 |
1 | 6,200 |
2 | 6,800 |
3 | 6,300 |
4 | 5,200 |
5 | 4,400 |
The company uses a 11 percent discount rate and an 10 percent reinvestment rate on all of its projects. Calculate the MIRR of the project using all three methods using these interest rates. |
Required: | |
(a) | MIRR using the discounting approach.(Do not round your intermediate calculations.) |
(Click to select) 22.64% 23.31% 21.77% 21.09% 22.2% |
(b) | MIRR using the reinvestment approach.(Do not round your intermediate calculations.) |
(Click to select) 15.35% 16.97% 16.48% 16.16% 16.82% |
(c) | MIRR using the combination approach.(Do not round your intermediate calculations.) |
(Click to select) 14.58% 15.66% 16.12% 15.73% 15.35% |
AND
A project has the following estimated data: price = $85 per unit; variable costs = $31.45 per unit; fixed costs = $6,200; required return = 9 percent; initial investment = $9,000; life = five years. Ignore the effect of taxes.
|
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