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Calculate the modified internal rate of return (MIRR) for a project
The company’s cost of borrowing is 9% and its weighted cost of capital is 14%. Calculate the modified internal rate of return (MIROR) for a project having these cash flows. _______%
Time of cash flow 0 1 2 3
Net Cash Flow -20 +6 +18 +9
Please show your work in detail. Thanks!
Time of cash flow 0 1 2 3
Net Cash Flow -20 +6 +18 +9
Please show your work in detail. Thanks!
Replies to This Discussion
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Permalink Reply by Arsen Hayrumyan on -
go to excel spread sheet and do this....
= MIRR(Cell (-20):Cell(9), 9%, 11%) = 23.11%
Another way is ((6x(1+14%)^2+18x(1+14%)^1+9x(1+14%)^0)/(20/(1+9%)^0))^ (1/3) - 1
9% = finance rate and 14% reinvestment rate
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