Solo Corp. is evaluating a project with the following cash flows: YearCash Flow0–$28,300 1 10,500 2 13,200 3 15,100 4 12,200 5– 8,700 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.)

Discount rate is 13% Reinvestment rate is 6%

Answered: Solo Corp. is evaluating a project with…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 22E

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Solo Corp. is evaluating a project with the following cash flows:

Year	Cash Flow
0	–$	28,300
1		10,500
2		13,200
3		15,100
4		12,200
5	–	8,700

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.)

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