Question
The Fitness Center is considering including a treadmill in this year's capital budget. The cash outlay for the treadmill is $1,500. The firm's cost of
The Fitness Center is considering including a treadmill in this year's capital budget. The cash outlay for the treadmill is $1,500. The firm's cost of capital is 8%. After-tax cash flows, including depreciation, are as shown in the following table. Calculate the modified internal rate of return (MIRR) for the project.
End of Year | Cash Flow |
|
1 | $490 | |
2 | 490 | |
3 | 490 | |
4 | 490 | |
5 | 490 |
The PV of all cash outflows is ___. (Round to the nearest cent.)
The future value of the cash inflows is ____. (Round to the nearest cent.)
The MIRR of the project is ___%. (Round to two decimal places.)
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