The project’s payback is 1.5 years, and it has a weighted average cost of capital of 10 percent. What is the project’s modified internal rate of return (MIRR)? MIRR>21% NUBD is considering the following project. The project has an up-front cost and willalso generate the following subsequent cash flows:ProjectCash FlowYear123P400500200

WACC = 10% Year Cash Flow 0 1 400 2…

Answered: The project’s payback is 1.5 years, and…

The project’s payback is 1.5 years, and it has a weighted average cost of capital of 10 percent. What is the project’s modified internal rate of return (MIRR)? MIRR>21%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6PA: There are two projects under consideration by the Rainbow factory. Each of the projects will require...

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Question

The project’s payback is 1.5 years, and it has a weighted average cost of capital of 10 percent. What is the project’s modified internal rate of return (MIRR)? MIRR>21%

NUBD is considering the following project. The project has an up-front cost and will
also generate the following subsequent cash flows:
Project
Cash Flow
Year
1
2
3
P400
500
200

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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