Project K costs $45,079.75, its expected cash inflows are $9,000 per year for 11

Question

Project K costs $45,079.75, its expected cash inflows are $9,000 per year for 11 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.

Project K costs $35,000, its expected cash inflows are $14,000 per year for 8 years, and its WACC is 11%. What is the project's MIRR? Round your answer to two decimal places.

Project K costs $70,000, its expected cash inflows are $14,000 per year for 9 years, and its WACC is 11%. What is the project's payback? Round your answer to two decimal places.

Explanation / Answer

a) IRR: (Using excel function)

=RATE(11,9000,-45079.75,0)

= 16.10%

b) MIRR (Using excel function):

=MIRR(Values selection, .11,.11)

= 21.48%

c) Payback period = 70000 / 14000

= 5 Years

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