Chamberlain Corp. is evaluating a project with the following cash flows: Year Ca

Question

Chamberlain Corp. is evaluating a project with the following cash flows:

Year         Cash Flow

0            -19,500

1             7,930

2             9,490

3             8,970

4             7,210

5          - 3,980

The company uses an interet rate of 10% on all of its projects. Calculate the MIRR of the project using all three methods. Discounting Approach, Reinvestment Approach and Combination Approach.

Can someone help me figure out how I can use HP10bII+ ? I was able to use the excel to get an answer but I need to be able to do this on the financial calculator. Thanks.

Explanation / Answer

Discounting Approach

FV=3980

I/Y=10%

N=5

CPT PV..PV=2471.267

CF0=-19500-2471.267=21971.27

CF1=7930

CF2=9490

CF3=8970

CF4=7210

CPT IRR

Reinvestment Approach

PV=7930

I/Y=10%

N=4

CPT FV..FV=11610.31

PV=9490

I/Y=10%

N=3

CPT FV..FV=12631.19

PV=8970

I/Y=10%

N=2

CPT FV..FV=10853.7

PV=7210

I/Y=10%

N=1

CPT FV..FV=7931

CF0=-19500

CF1=0

CF2=0

CF3=0

CF4=0

CF5=-3980+7931+10853.7+12631.19+11610.31

CPT IRR

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