Hindelang Inc.is considering a project that has the following cash flow and WACC data.What is the project's MIRR? Note that a project's projected MIRR can be less than the WACC (and even negative),in which case it will be rejected. $\begin{array}{lcccc}
\text { WACC: } & 10.00 \% \
\text { Year: } & 0 & 1 & 2 & 3&4 \
\hline \text { Cash flows: } &-\$ 900 & \$ 300 & \$ 320 & \$ 340 & \$ 360
\end{array}$
A)12.61%
B)14.01%
C)15.41%
D)16.95%

Question

Hindelang Inc.is considering a project that has the following cash flow and WACC data.What is the project's MIRR? Note that a project's projected MIRR can be less than the WACC (and even negative),in which case it will be rejected. $\begin{array}{lcccc}
\text { WACC: } & 10.00 \% \
\text { Year: } & 0 & 1 & 2 & 3&4 \
\hline  \text { Cash flows: } &-\$ 900 & \$ 300 & \$ 320 & \$ 340 & \$ 360
\end{array}$
A)12.61%
B)14.01%
C)15.41%
D)16.95%

Quizplus · Accepted Answer

The MIRR is calculated by finding the future value of positive cash flows at the WACC and the present value of negative cash flows at the WACC, then finding the rate that equates these values over the project's life. For this project, the MIRR is 14.01%.

Hindelang Inc A)1261% B)14

Hindelang Inc A)1261%
B)14