Which project has the higher MIRR

Reference no: EM131957988

Question: Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below: Year X Y 0 -$5,000 -$5,000 1 1000 4,500 2 1500 1500 3 2000 1000 4 4000 500 The projects are equally risky, and their cost of capital is 15%. You must make a recommendation, and you must base it on the modified IRR (MIRR). Calculate the two projects' MIRRs. Round your answers to two decimal places. Project X % Project Y % Which project has the higher MIRR?

Reference no: EM131957988

Questions Cloud

What should be the price of the stock : Company CS paid cash dividends of $1 per share. The management of the company estimates that the growth rate of dividends is 20% per year for the next ten.

Estimate the current value of the stock using assumption : Casey Hyunh is trying to value the stock of Resources Limited. Estimate the current value of the stock using the above assumptions.

What is the RADR for each project : A company is considering investment in one of two mutually exclusive projects, X and Y. The cost of capital is 15% and the risk-free rate is 10%.

Commissions effectiveness evaluation of audit committee : Every year, the board of directors of Northern Power, a distributor of electricity, commissions an effectiveness evaluation of its audit committee.

Which project has the higher MIRR : Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below: Year X Y 0 -$5,000 -$5,000 1 1000 4,500.

What will be the loan balance at the end of year three : A reverse mortgage is made with a balance not to exceed $300,000 on a property now valued at $700,000. What will be the loan balance at the end of year 3?

Estimate the present value of the tax benefits : Your Company is considering a new project that will require $990,000 of new equipment at the start of the project. The equipment will have a depreciable.

Evaluate the project using the IRR method : Your company is considering a project which requires a $30,000 initial investment with a predicted salvage value at the end of its six year useful life.

What is the OFC and final analysis : The company is considering operating a new driving range facility in Sanford, fl. In order to do so, they will need to purchase a ball dispensing machine.

User Account

All Pages