Question
Your firm is considering a project that will cost $4.678 million up front, generate cash flows of $3.54 million per year for 3 years, and
Your firm is considering a project that will cost $4.678 million up front, generate cash flows of $3.54 million per year for 3 years, and then have a clean up and shut down 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?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
