A project has an initial cost of $48,900 and cash flows of $31,300,-$11,600,and $40,300 for Years 1 to 3,respectively.The discount rate is 14 percent.What is the modified IRR?
A)11.68%
B)15.59%
C)10.59%
D)12.67%
E)14.92%

Question

Quizplus · Accepted Answer

Modified Year 1 cash flow = $31,300 + (-$11,600)/ 1.14 = $21,124.56 $0 = -$48,900 + $21,124.56 / (1 + MIRR)+ $40,300 / (1 + MIRR)³ MIRR = 0.1059,or 10.59%

A Project Has an Initial Cost of $48,900 and Cash