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Winston Clinic is evaluating a project that costs $50,000 and has expected net cash inflows of...

Winston Clinic is evaluating a project that costs $50,000 and has expected net cash inflows of $12,000 per year for eight years. The first inflow occurs one year after the cost outflow, and the project has a cost of capital of 12%. What is the project’s MIRR? (hint: remember to put the answer as a percentage). Choice: 13.9% Choice: 14.5% Choice: 5.80% Choice: 22.1%

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Expert Solution

14.5%

Year Cash flows
0 $       -50,000
1             12,000
2             12,000
3             12,000
4             12,000
5             12,000
6             12,000
7             12,000
8             12,000
Cost of capital 12%
MIRR =MIRR(values,finance rate,reinvestment rate)
=MIRR(B2:B10,B12,B12)
14.5%
B2:B10 is the range of cash flows and B12 is the cost of capital and reinvestment rate.

jeff jeffy answered 10 months ago
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