Chamberlain Corp. is evaluating a project with the following cash flows. The company uses a discount rate of 10 percent and a reinvestment rate of 7 percent on all of its projects.
Calculate the MIRR of the project using all three methods using these interest rates.
Discounting approach
Reinvestment approach
Combination approach
| Year | Cash Flow | |||
| 0 | –$ | 16,400 | ||
| 1 | 7,500 | |||
| 2 | 8,700 | |||
| 3 | 8,300 | |||
| 4 | 7,100 | | ||
| 5 | – | 4,500 |
Calculate the MIRR of the project using all three methods using these interest rates.
Discounting approach
Reinvestment approach
Combination approach