EBK FUNDAMENTALS OF CORPORATE FINANCE
EBK FUNDAMENTALS OF CORPORATE FINANCE
3rd Edition
ISBN: 9780133762808
Author: Harford
Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)
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Chapter 8, Problem 22P
Summary Introduction

Internal Rate of return: Internal rate of return is that rate at which the present value of cash inflows is similar to the present value of cash outflows and resulted net present value became zero.

Modified Internal Rate of Return: The investment can have the more than one internal rates of return that can create the ambiguity, to remove this limitation of the internal rate of return, the investors use the rate which known as modified interval rate of return.

To Identify: The modified internal rate of return, to evaluate the maximum shutdown cost can be incurred still meet the cost of capital at 15%.

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