Project X has a project with cost of capital of 8 percent,initial cost of $1,000,and annual after-tax cash flow of $450 for 3 years.Cash flow is reinvested at 8 percent.What are the IRR and MIRR,respectively?

Question

Quizplus · Accepted Answer

Using a financial calculator (TI BA II Plus):
[CF][2nd][CLR WORK]
CF0=-1,000,C01=450,F01=3,IRR,CPT.IRR=16.65%
 11ea8229_3485_433e_bbd8_39e6990a8289_TB1726_00 The future value of the reinvested cash flows,FV,is $1,460.88,and the MIRR is 13.47 percent:
PV = $1,000
FV = $1,460.88
N = 3
Solve for I/Y → I/Y = 13.47%

Project X Has a Project with Cost of Capital of 8