In: Advanced Math
#1 Part 1: Find the payback in years (to the nearest hundredths place) for the following cash flow with a WACC of 4%:
Time Period Cash Flow Cumulative Out of Pocket
0 -100 -100
1 40 -60
2 50 -10
3 20 +10
4 70 +80
#1 Part 2: Find the discounted payback in years (to the nearest hundredths place) for the following cash flow with a WACC of 12%. Hint: interpolation must be used and I have started the table for you.
Time Period Cash Flow PV of Cash Flow Cumulative
0 -100 -100 -100
1 40 35.71 -64.29
2 50 ? ?
3 20 ? ?
4 70 ? ?
Reminder, your payback numbers are in units of years.
#2 Calculate the MIRR of the cash flows of the project below. Assume both the finance rate and the reinvestment rate are 5%
Time Period Cash Flow
0 -100
1 20
2 80
3 90