Mittuch Corp. is evaluating a project with the following cash flows. The company uses adiscount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects.YearCash Flow50512345-$16,0007,1008,3007,9006,7004,100Calculate the MIRR of the project using all three methods with these interest rates. (Donot round intermediate calculations and enter your answers as a percent rounded to2 decimal places, e.g., 32.16.)Answer is complete but not entirely correct.Discounting approachMIRR20.12%Reinvestment approachCombination approach\1.80%20.12%

Step 1: Future Value of Positive Cash Flows (Reinvestment Rate = 8%)For the cash flows in years 1 to…

Answered: Mittuch Corp. is evaluating a project…

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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Mittuch Corp. is evaluating a project with the following cash flows. The company uses a discount rate of 10 percent and a reinvestment rate of 7 percent on all of its projects. Year 012345 Cash Flow -$15,900 7,000 8,200 7,800 6,600 - 4,000 Calculate the MIRR of the project using all three methods with these interest rates. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) MIRR Discounting approach 24.72% Reinvestment approach 15.65% Combination approach 14.84 %
Duo Corporation is evaluating a project with the following cash flows. The company uses a discount rate of 12 percent and a reinvestment rate of 9 percent on all of its projects. Year 0 Cash Flow -$ 16,600 12345 7,700 8,900 8,500 5 7,300 -4,700 Calculate the MIRR of the project using all three methods with these interest rates. Note: Do not round intermediate calculations and enter your answers as a 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. The company uses a discount rate of 9 percent and a reinvestment rate of 6 percent on all of its projects. Year 0 12345 4 5 Cash Flow -$ 15,200 6,300 7,500 7,100 5,900 -3,300 Calculate the MIRR of the project using all three methods with these interest rates. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach Combination approach de de % % 12.40%
Mittuch Corp. is evaluating a project with the following cash flows. The company uses a discount rate of 10 percent and a reinvestment rate of 7 percent Year Cash Flow 0 -$16,900 1 8,000 IT 2 9,200 3 8,800 4 7,600 5 -5,000 Calculate the MIRR of the project using all three methods with these interest rates. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) MIRR Discounting approach Reinvestment approach Combination approach all of its projects. % % %
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Duo Corporation is evaluating a project with the following cash flows. The company uses a discount rate of 8 percent and a reinvestment rate of 5 percent on all of its projects. Cash Flow -$ 15,800 Year 0 1 6,900 2 8,100 3 7,700 4 5 6,500 -3,900 Calculate the MIRR of the project using all three methods with these interest rates. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Discounting approach Reinvestment approach Combination approach % % %
Solo Corporation is evaluating a project with the following cash flows: Year Cash Flow 0-$ 13,800 1 6,200 26,900 3 6,600 45,500 5-6,000 The company uses a disount rate of 11 percent and a reinvestment rate of 8 percent on all of its projects. Calculate the MIRR of the project using all three methods using these interest rates. a. MIRR using the discounting approach. b. MIRR using the reinvestment approach. c. MIRR using the combination approach.
Solo Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 29,500 1 11,700 2 14,400 3 16,300 4 13,400 5 9,900 The company uses a discount rate of 13 percent and a reinvestment rate of 6 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b.Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Discounting approach MIRR b. Reinvestment approach MIRR C. Combination approach MIRR % % %
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Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow 0 −$ 15,200 1 6,300 2 7,500 3 7,100 4 5,900 5 −3,300 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 a percent rounded to 2 decimal places, e.g., 32.16.
You have the opportunity to invest in a project with the following cash flows. Initial investment/Outlay today: $11,000. Cashflow back to you in 1 year $6000 Cashflow back to you in 2 years $5000 Scrap Value in 2 years $500 Assume interest rates are 5% in the 1 year and 7% in the 2 year. (tip: use the spreadsheet “NPV” from Moodle to helpin your calculations) a. Calculate the NPV of the project (show formula/workings)? b. Should you invest in this project? Why ?

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