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Given the following data, use Excel's syntax (and show the formulas) to calculate the MIRR for a project with an expected economic life six years and a salvage value of $1,000 (the last data entry). The end-of-period cash flows are expected to increase at the rate of 10% per annum.

Project data:

outlay cost: -$10,000

Estimated end-of-period cash flows: -$2,000, $5,000, $4,000, $3,000, $5,000, and $1,000

To estimate the MIRR, compute the Future Value of the cash flows at the rate of ten per cent and solve for the discount rate that discounts this future value back to the present value of $10,000.

Please explain the process and the results in a written PROFESSIONAL MANNER.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92800245

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