TL Lumber is evaluating a project with cash flows of -$12,800, $7,400, $11,600, and -$3,200 for Years 0 to 3, respectively. Given an interest rate of 8 percent, what is the MIRR using the discounted approach?
A) 13.25 percent
B) 14.08 percent
C) 15.40 percent
D) 14.36 percent
E) 19.23 percent

Question

TL Lumber is evaluating a project with cash flows of -$12,800, $7,400, $11,600, and -$3,200 for Years 0 to 3, respectively. Given an interest rate of 8 percent, what is the MIRR using the discounted approach?
A) 13.25 percent 
B) 14.08 percent 
C) 15.40 percent 
D) 14.36 percent 
E) 19.23 percent

Quizplus · Accepted Answer

The MIRR using the discounted approach is 14.36 percent. This is the interest rate that equates the present value of the positive cash flows to the present value of the negative cash flows.

TL Lumber Is Evaluating a Project with Cash Flows of -$12,800