Calculate the MIRR of the project using the discounting approach method. (Do not

Question

Calculate the MIRR of the project using the discounting approach method. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Calculate the MIRR of the project using the reinvestment approach method. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Calculate the MIRR of the project using the combination approach method. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Reinvestment approach:
[t=5] cashflow = 11,400x(1+9%)^4 + 14,100x(1+9%)³ + 16,000x(1+9%)² +
+ 13,100x(1+9%)¹ -9,600/(1+9%)° = 58,040.54

0 = -29,200 + 58,040.54/(1+MIRR)^5

29,200(1+MIRR)^5 = 58,040.54

(1+MIRR)^5 = 1.99
Solving equation we get: MIRR 0.147 14.7%

Combination approach:
[t=5] cashflow = 11,400x(1+9%)^4 + 14,100x(1+9%)³ + 16,000x(1+9%)² +
+ 13,100x(1+9%)¹ = 67,640.54
[t=0] cashflow = -29,200 – 9,600/(1+9%)^5 = -17'444.6
0 = -35439.34 + 67,640.54/(1+MIRR)^5

35,439.34(1+MIRR)^5 = 67,640.54

(1+MIRR)^5 = 1.99

Solving equation we get: MIRR 0.1380 13.80%

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