Calculate project's modified IRR (MIRR)?
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Los Angeles Lumber Company (LALC) is considering a project with a cost of $1,000 at time = 0 and inflows of $300 at the end of Years 1 - 5. LALC's cost of capital is 10 percent. What is the project's modified IRR (MIRR)?
a. 10.0%
b. 12.9%
c. 15.2%
d. 18.3%
e. 20.7%
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This post gives a detailed solution for calculating project's modified IRR (MIRR).
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Solution: b. 12.9%
Tabular/Numerical solution:
TV = $300(FVIFA 10%,5 ) = $300(6.1051) = $1,831.53. ...
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