Compute the MIRR statistic for Project J and advise whether to accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent.
Project J

A)The project's MIRR is 14.77 percent and the project should be accepted.
B)The project's MIRR is 9.29 percent and the project should be rejected.
C)The project's MIRR is 13.76 percent and the project should be accepted.
D)The project's MIRR is 15.31 percent and the project should be accepteD.Using a financial calculator: PV = -1437.75; FV = 2739.11; N = 5; PMT = 0; I = MIRR = 13.76 percent; Accept since MIRR Cost of capital.

Question

Compute the MIRR statistic for Project J and advise whether to accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent.
Project J

A)The project's MIRR is 14.77 percent and the project should be accepted. 
B)The project's MIRR is 9.29 percent and the project should be rejected. 
C)The project's MIRR is 13.76 percent and the project should be accepted. 
D)The project's MIRR is 15.31 percent and the project should be accepteD.Using a financial calculator: PV = -1437.75; FV = 2739.11; N = 5; PMT = 0; I = MIRR = 13.76 percent; Accept since MIRR> Cost of capital.

Quizplus · Accepted Answer

The MIRR statistic for Project J is calculated as 13.76 percent using the given cash flows and a 10 percent cost of capital. Since the MIRR is higher than the cost of capital, the project should be accepted. Therefore, the best choice is C.

Compute the MIRR Statistic for Project J and Advise Whether