Computer Consultants Inc. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's MIRR? Note that a project's MIRR can be less than the cost of capital (and even negative), in which case it will be rejected.
$\begin{array} { l c c c c }
&r = 10.00 \%\
\text { Year } & 0 & 1 & 2 & 3 \
\text { Cash Elows } & - \$ 1,000 & \$ 400 & \$ 400& \$ 450
\end{array}$

Question

Computer Consultants Inc. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's MIRR? Note that a project's MIRR can be less than the cost of capital (and even negative), in which case it will be rejected.
 $\begin{array} { l c c c c } 
&r = 10.00 \%\
\text { Year } & 0 & 1 & 2 & 3 \
\text { Cash Elows }  & - \$ 1,000 & \$ 400 & \$ 400& \$ 450
\end{array}$

Quizplus · Accepted Answer

$\begin{array}{lcccr}
WACC&10.00\%\
\text { Year } & 0 & 1 & 2 & 3 \
\text { Cash flows } & -\$ 1,000 & \$ 450 & \$ 450 & \$ 450\
(\text { Compounded values, FVS }&\$ 544.50 & \$ 495.00 &  &\$ 450.00 
\end{array}$ 
TV = Sum of compounded inflows: $1,489.50
 $\begin{array}{ll}
\text { MIRR }=14.20 \% & \text { Found as discount rate that equates PV of TV to cost, discounted } \
&\text { back 3 years@,WACC } \
\text { MIRR }=14.20 \% & \text { Alternative calculation, using Excel's MIRR function }
\end{array}$

Computer Consultants Inc A) 932% B) 10

Computer Consultants Inc A) 932%
B) 10