A project has a series of non-normal cash flows that result in a terminal value (TV) of $121,900 in 6 years.If the project's initial costs are $50,000,what is your recommendation regarding this project to management (accept/reject)?
A)accept as the MIRR is 12%
B)reject as the MIRR is greater than zero
C)accept as the terminal value is greater than the present value of the costs
D)accept as the MIRR is 16.00%

Question

Quizplus · Accepted Answer

The Modified Internal Rate of Return (MIRR) is 16.00%, which is typically higher than the cost of capital, indicating that the project is expected to generate a return greater than the cost, making it a good investment.

A Project Has a Series of Non-Normal Cash Flows That