I am considering the following project. The project has an up-front cost and will also generate the following subsequent cash flows:
t=1 $400, t=2 $500, t=3 $200
The project's payback is 1.5 years, and it has a cost of capital of 10 percent.© BrainMass Inc. brainmass.com June 3, 2020, 10:16 pm ad1c9bdddf
See attached Excel worksheet.
Step 1: Calculate the initial up front cost
payback period= 1.5 years
Therefore upfront cost= Year 1 cash flow + 0.5 x Year 2 cash flow= $650 =400+0.5*500
Thus the cash flow ...
Calculates Modified Internal Rate of Return (MIRR) for a project.