Frazier Fudge has a project with an initial outlay of $40,000,followed by three years of annual incremental cash flows of $35,000.The terminal cash flow of the project is $10,000.Assuming a cost of capital of 10%,calculate the MIRR of the project.
A)46.5%
B)51.3%
C)62.9%
D)74.7%

Question

Quizplus · Accepted Answer

MIRR is calculated as the IRR of the terminal value of the project's cash flows, divided by the IRR of the initial investment. In this case, the terminal value of the project's cash flows is $10,000, and the IRR of the initial investment is 10%. Therefore, the MIRR of the project is 10% / 10% = 100%.

Frazier Fudge Has a Project with an Initial Outlay of $40,000,followed