A corporation is evaluating a project with the following cash flows: Year 0: -28700 Year 1: 10900 Year 2: 13600 Year 3: 15500 Year 4: 12600: Year 5: -9100 The company uses a discount rate of 12% and a reinvestment rate of 7% on its project:   a) Calculate MIRR using the discounting approach. b) Calculate MIRR using the reinvestment approach c) Calculate MIRR using the combination approach.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A corporation is evaluating a project with the following cash flows:

Year 0: -28700

Year 1: 10900

Year 2: 13600

Year 3: 15500

Year 4: 12600:

Year 5: -9100

The company uses a discount rate of 12% and a reinvestment rate of 7% on its project:

 

a) Calculate MIRR using the discounting approach.

b) Calculate MIRR using the reinvestment approach

c) Calculate MIRR using the combination approach. 

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