Wiley's Wire Products 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. $\begin{array}{lcccc}
&r=11.00 \%\
\text { Year } & 0 & 1 & 2 & 3 \
\text { Cash flows } & -\$ 800 & \$ 350 & \$ 350 & \$ 350
\end{array}$

Question

Wiley's Wire Products 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. $\begin{array}{lcccc}
&r=11.00 \%\
\text { Year } & 0 & 1 & 2 & 3 \
 \text { Cash flows } & -\$ 800 & \$ 350 & \$ 350 & \$ 350
\end{array}$

Quizplus · Accepted Answer

$\begin{array} {lcccc } 
WACC &11.00 \% \
 \text { Year }&0 & 1 & 2 & 3 \
\hline\text { Cash flows}&- \$ 800 & \$ 350 & \$ 350 & \$ 350 \
\text { Compounded values, FVs}&\$ 431.24 & \$ 388.50 &&\$ 350.00
\end{array}$ 
TV = Sum of compounded inflows: $1,169.74
 $\begin{array}{ll}
\text { MIRR }=13.50 \% & \text { Found as discount rate that equates PV of TV to cost, discounted } \
&\text { back 3 years@,WACC } \
\text { MIRR }=13.50 \% & \text { Alternative calculation, using Excel's MIRR function }
\end{array}$

Wiley's Wire Products Is Considering a Project That Has the Following