A project has projected cash flows of -$125,000, $35,000, $50,000, -$10,000 and $100,000 for years 0 to 4, respectively. Should this project be accepted based on the modified internal rate of return if both the finance rate and the reinvestment rate are 10.0 percent? Why or why not? No; The MIRR is 8.67 percent. No; The MIRR is 10.00 percent. Yes; The MIRR is 8.67 percent. Yes; The MIRR is 11.81 percent. No; The MIRR is 11.81 percent.

A project has projected cash flows of -$125,000, $35,000, $50,000, -$10,000 and $100,000 for years 0 to 4, respectively. Should this project be accepted based on the modified internal rate of return if both the finance rate and the reinvestment rate are 10.0 percent? Why or why not? No; The MIRR is 8.67 percent. No; The MIRR is 10.00 percent. Yes; The MIRR is 8.67 percent. Yes; The MIRR is 11.81 percent. No; The MIRR is 11.81 percent.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 14P

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