Suppose (1) re-finance rate remains constant, (2) all cashflows are incurred in the end of the year, (3) re-investment rate increases by 10% a year, and (4) the inflation rate is constant at 2% a year. For MIRR, please use MIRR formula (not excel function) to caluclate MIRR. year cashflow -5000 1 2000 1000 3 1000 4 1000 2000 6 500 7 -100 Refinance rate 5% reinvestment rate10% inflation rate 2% discount rate 7% MIRR
Suppose (1) re-finance rate remains constant, (2) all cashflows are incurred in the end of the year, (3) re-investment rate increases by 10% a year, and (4) the inflation rate is constant at 2% a year. For MIRR, please use MIRR formula (not excel function) to caluclate MIRR. year cashflow -5000 1 2000 1000 3 1000 4 1000 2000 6 500 7 -100 Refinance rate 5% reinvestment rate10% inflation rate 2% discount rate 7% MIRR
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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Transcribed Image Text:Suppose (1) re-finance rate remains constant, (2)
all cashflows are incurred in the end of the year, (3)
re-investment rate increases by 10% a year, and (4)
the inflation rate is constant at 2% a year.
For MIRR, please use MIRR formula (not excel
function) to caluclate MIRR.
year
cashflow
-5000
1
2000
2
1000
1000
4
1000
2000
6.
500
7
-100
Refinance rate
5%
reinvestment rate10%
inflation rate
2%
discount rate
7%
MIRR
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