Duo Corporation is evaluating a project with the following cash flows: Year 0 1 2 Cash Flow -$ 16,700 7,800 9,000 8,600 7,400 -4,800 The company uses an interest rate of 12 percent on all of its projects. Calculate the MIRR of the project using all three methods Note: Do not round intermediate calculations and enter your answers as e percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach Combination approach % % %

Duo Corporation is evaluating a project with the following cash flows: Year 0 1 2 Cash Flow -$ 16,700 7,800 9,000 8,600 7,400 -4,800 The company uses an interest rate of 12 percent on all of its projects. Calculate the MIRR of the project using all three methods Note: Do not round intermediate calculations and enter your answers as e percent rounded to 2 decimal places, e.g., 32.16. 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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Case 1: Assume you are evaluating two mutually exclusive projects,the cash flows of which appear below, and that your company uses a cost of capital of 8 percent to evaluate projects such as these. Time Project A Cash Flow Project B Cash Flow 0 -$650 -$700 1 100 300 2 250 -200 3 250 550 4 200 200 5 100 80 a. Calculate the payback of Project A. b. Calculate the discounted payback of Project A. c. Calculate the IRR of Project A. d. Using the NPV method and assuming a cost of capital of 8 percent, which of these projects should be accepted?
A project has the following cash flows: Cash Year Flow 16,300 1 7,000 8,300 6,800 2 3 a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 12 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 19 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the NPV at a discount rate of 28 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) а. NPV b. NPV C. NPV NPV
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Porter Company is analyzing two potential Investments. Project X $ 97,090 Initial investment Net cash flow: Year 1 Year 2 Year 3 Year 4 Multiple Choice If the company is using the payback period method, and it requires a payback of three years or less, which project(s) should be selected? O 32,500 32,500 32,500 0 Both X and Y are acceptable projects. O Project Y. Project Y $ 77,000 Project Y because it has a lower Initial Investment. Project X 5,700 34,500 34,500 25,000 Neither X nor Y is an acceptable project.
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Son.5 Solo Corporation is evaluating a project with the following cash flows: Year Cash Flow: 0 −$ 29,900 1 12,100 2 14,800 3 16,700 4 13,800 5 −10,300 The company uses an interest rate of 10 percent on all of its projects. Calculate the MIRR of the project using all three methods. a. MIRR using the discounting approach. b. MIRR using the reinvestment approach. c. MIRR using the combination approach.
Green Submarine has a project with the following cash flows: Year Cash Flows −$17,400 1 6,630 2 11,300 3 7,590 4 −2,600 The discounting rate is 10 percent and the reinvestment rate is 12 percent. What is the MIRR for this project using the combination approach? Multiple Choice 12.88% 16.52% 13.65% 14.51% 15.38%
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