Need help with b and c. Your firm is considering a project that will cost $4,637

Question

Need help with b and c.

Your firm is considering a project that will cost $4,637 million up front, generate cash flows of $3.54 million per year for 3 years, and then have a cleanup and shutdown cost of $6.02 million in the fourth year. How many IRRs does this project have? Calculate a modified IRR for this project assuming a discount and compounding rate of 10.2%. Using the MIRR and a cost of capital of 10.2%, would you take the project? How many IRRs does this project have? The project has 2 IRRs. (Select from the drop-down menu.) Calculate a modified IRR for this project assuming a discount and compounding rate of 10.2%. The MIRR for this project is %(Round to two decimal places.)

Explanation / Answer

Or

b MIRR =(12.9376/8.7190)^(1/4) - 1 =10.37%

c MIRR Is more than Cost of Capital of 10.20% it advisable to take the project

0 -4.637 1 3.54 2 3.54 3 3.54 4 -6.02 MIRR using Excel MIRR Funtion 10.37%

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