You've just learned that the analyst who assembled the project's projected cash flow information used incorrect data. You've reexamined the source data and determined that the revised annual cash flow information should be: Year Cash Flow 0 1 2 3 4 Again, if Trent's desired rate of return is 7.00%, then the project's revised modified internal rate of return (MIRR) should be Round all dollar amounts to the nearest whole dollar, and your final MIRR value to two decimal places.) -$998,750 275,000 -300,000 360,000 240,000 No If, again, Trent's managers continue to exhibit their general conservatism and select their investment projects based only on the project's MIRR, should they accept the project? Yes (Hint:
You've just learned that the analyst who assembled the project's projected cash flow information used incorrect data. You've reexamined the source data and determined that the revised annual cash flow information should be: Year Cash Flow 0 1 2 3 4 Again, if Trent's desired rate of return is 7.00%, then the project's revised modified internal rate of return (MIRR) should be Round all dollar amounts to the nearest whole dollar, and your final MIRR value to two decimal places.) -$998,750 275,000 -300,000 360,000 240,000 No If, again, Trent's managers continue to exhibit their general conservatism and select their investment projects based only on the project's MIRR, should they accept the project? Yes (Hint:
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:Trent Manufacturing Inc. is analyzing a project with the following projected cash flows:
Year Cash Flow
0
1
2
3
4
This project exhibits
-$1,324,800
300,000
450,000
546,000
360,000
Trent's desired rate of return is 7.00%. Given the cash flows expected from the company's new project, compute the project's anticipated modified
internal rate of return (MIRR). (Hint: Round all dollar amounts to the nearest whole dollar, and your final MIRR value to two decimal places.)
6.70%
O
7.53%
8.37%
O 10.04%
Trent's managers are generally conservative, and select projects based solely on the project's modified internal rate of return (MIRR). Should the
company's managers accept this independent project?
No
cash flows.
Yes
Transcribed Image Text:Trent Manufacturing Inc. is analyzing a project with the following projected cash flows:
Year Cash Flow
0
1
2
3
4
This project exhibits
-$1,324,800
300,000
450,000
546,000
360,000
Trent's desired rate of return is 7.00%. Given the cash flows expected from the company's new project, compute the project's anticipated modified
internal rate of return (MIRR). (Hint: Round all dollar amounts to the nearest whole dollar, and your final MIRR value to two decimal places.)
6.70%
O
7.53%
8.37%
O 10.04%
Trent's managers are generally conservative, and select projects based solely on the project's modified internal rate of return (MIRR). Should the
company's managers accept this independent project?
No
cash flows.
Yes
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