Question
Your firm is considering a project that will cost $4.494 million up front, generate cash flows of $3.47 million per year for 3 years, and
Your firm is considering a project that will cost $4.494 million up front, generate cash flows of $3.47 million per year for 3 years, and then have a cleanup and shutdown cost of $5.98 million in the fourth year.
a. How many IRRs does this project have?
b. Calculate a modified IRR for this project assuming a discount and compounding rate of 10.4%.
c. Using the MIRR and a cost of capital of 10.4%, would you take the project?
a. How many IRRs does this project have?
The project has
1
2
3
4
IRRs.(Select from the drop-down menu.)
b. Calculate a modified IRR for this project assuming a discount and compounding rate of 10.4%. The MIRR for this project is nothing%. (Round to two decimal places.)'
c. Using the MIRR and a cost of capital of 10.4%,
would you take the project?(Select from the drop-down menu.)
Yes/No , the project should be taken because the MIRR>10.4%.
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