Doak Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 -15,300 1 6,400 2 7,600 3 7,200 4 6,000 5 -3,400 The company uses an interest rate of 9 percent on all its projects. Calculate the MIRR of the project using all three methods. Discounting approach ____________% Reinvestment approach ___________% Combination approach ____________%
Doak Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 -15,300 1 6,400 2 7,600 3 7,200 4 6,000 5 -3,400 The company uses an interest rate of 9 percent on all its projects. Calculate the MIRR of the project using all three methods. Discounting approach ____________% Reinvestment approach ___________% 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
Section: Chapter Questions
Problem 1PS
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Question
Doak Corp. is evaluating a project with the following cash flows:
Year Cash Flow
0 -15,300
1 6,400
2 7,600
3 7,200
4 6,000
5 -3,400
The company uses an interest rate of 9 percent on all its projects. Calculate the MIRR of the project using all three methods.
Discounting approach ____________%
Reinvestment approach ___________%
Combination approach ____________%
Expert Solution
Step 1
MIRR[(-15300 *1) -3400/(1.09)5, 6400,7600,7200,6000,0]
[-15300 -3400/1.53862 ,6400,7600,7200,6000,0]
[ -17509.77,6400,7600,7200,6000,0] = 14.17%
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