Turner Enterprises is analyzing a project that is expected to have annual cash flows of $46,400,$51,300 and -$15,200 for Years 1 to 3,respectively.The initial cash outlay is $65,900 and the discount rate is 12 percent.What is the modified IRR?
A)17.77%
B)18.13%
C)18.66%
D)17.04%
E)16.98%

Question

Quizplus · Accepted Answer

Modified Year 2 cash flow = $51,300 + (-$15,200)/ 1.12 = $37,728.57 $0 = -$65,900 + $46,400 / (1 + MIRR)+ $37,728.57 / (1 + MIRR)² MIRR = .1866,or 18.66%

Turner Enterprises Is Analyzing a Project That Is Expected to Have