Modified Internal Rato of Return Using a cost of capital of 14%, calculate the M

Question

Modified Internal Rato of Return Using a cost of capital of 14%, calculate the Modi ed Internal Rate of Ret The Modified Internal Rate of Return MIRR) % of p o ect A is Round to 2 decimal points.) Is project A acceptable? (Select the best answer below.) No MIRR for each of the independent pro ects shown in the following table and indicate whether each is acceptable Data Table Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) O Yes The Modified Internal Rate of Return (MRR) fproject B is%. Is project B acceptable? (Select the best answer below.) O Yes Project A $26,000 Project B S500.000 Project C $170,000 Project D $950,000 Project E $80.000 (Round to 2 decimal points.) Initial investment (CFO) Year () Cash inflows (CF) 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 ,000 4,000 00,000 120,000 140,000 160,000 180,000 200,000 19,000 18,000 17,000 16,000 15,000 14,000 13,000 12,000 11,000 230,000 230,000 230,000 230,000 230,000 230,000 230,000 20,000 30,000 %. (Round to 2 decimal points.) The Modified Intemal Rate of Return (MIRR) of project C is Is project C acceptable? (Select the best answer below.) O Yes 50.000 60,000 70,000 %. The Modified Internal Rate of Retur MRR) of project D is Is project D acceptable? (Select the best answer below.) O No ( Round to 2 decimal points.) Print Done O Yes The Modified Internal Rate of Return (MIRR) of project E is Is project E acceptable? (Select the best answer below) %. (Round to 2 decimal points.) Yes

Explanation / Answer

14% 14% 14% 14% 14% Year Project A Project B Project C Project D Project E 0        -26,000 -5,00,000 -1,70,000 -9,50,000      -80,000 1            4,000    1,00,000        20,000    2,30,000 2            4,000    1,20,000        19,000    2,30,000 3            4,000    1,40,000        18,000    2,30,000 4            4,000    1,60,000        17,000    2,30,000        20,000 5            4,000    1,80,000        16,000    2,30,000        30,000 6            4,000    2,00,000        15,000    2,30,000                 -   7            4,000        14,000    2,30,000        50,000 8            4,000        13,000    2,30,000        60,000 9            4,000        12,000        70,000 10            4,000        11,000 MIRR 11.52% 15.96% 6.53% 15.67% 24.12% Project Acceptable NO YES NO YES YES Assumed reinvest rate and finance rate are same

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