An investor is considering a project that will generate $800 000 per year for four years. In addition to up-front costs, at the completion of the project at the end of the fifth year there will be shut-down costs of $500 000. If the cost of capital is 5%, based on the MIRR, at what up-front costs does this project cease to be worthwhile?
A)$2.84 million
B)$2.44 million
C)$2.32 million
D)$2.58 million

Question

Quizplus · Accepted Answer

The Answer of An investor is considering a project that will generate $800 000 per year for four years. In addition to up-front costs, at the completion of the project at the end of the fifth year there will be shut-down costs of $500 000. If the cost of capital is 5%, based on the MIRR, at what up-front costs does this project cease to be worthwhile?
A)$2.84 million
B)$2.44 million
C)$2.32 million
D)$2.58 million

An Investor Is Considering a Project That Will Generate $800