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
Related questions
Question
return.
Quark Industries has three potential projects, all with an initial cost of
$1,900,000.
Given the discount rate and the future cash flow of each project, what are the IRRs and MIRRs of the three projects for Quark Industries?
Cash Flow
|
Project M
|
Project N
|
Project O
|
|
||
Year 1
|
$500,000
|
|
$600,000
|
|
$1,000,000
|
|
Year 2
|
$500,000
|
|
$600,000
|
|
$800,000
|
|
Year 3
|
$500,000
|
|
$600,000
|
|
$600,000
|
|
Year 4
|
$500,000
|
|
$600,000
|
|
$400,000
|
|
Year 5
|
$500,000
|
|
$600,000
|
|
$200,000
|
|
Discount rate
|
9%
|
13%
|
16%
|
What is the IRR for project M?
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