Question
Sylvania Inc. is considering a project that has the following cash flow and WACC data. WACC: 11.00% Year 0 1 2 3 4 Cash flows
Sylvania Inc. is considering a project that has the following cash flow and WACC data.
| WACC: | 11.00% |
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| Year | 0 | 1 | 2 | 3 | 4 |
| Cash flows | -$1,000 | $400 | $360 | $360 | $350 |
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. Is this a good project to undertake or not? Explain. What is the projects NPV? Is this a good project to undertake or not? Explain. What is the projects IRR? Is this a good project to undertake or not? Explain. Did you reach to the same conclusion in each of the decision criteria above? Why or Why not?
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Public Finance
Authors: Richard W. Tresch
4th Edition
0128228644, 978-0128228647
