Unformatted text preview: PV costs = $4,400,000 + $25,000,000/(1.08) 2 = $25,833,470.51. TV inflows = $27,700,000(1.08) 1 = $29,916,000.00. Now, MIRR is that discount rate which forces the PV of the TV of $29,916,000 over 2 years to equal $25,833,470.51: $25,833,470.51 = $29,916,000(PVIF r,2 ). Inputs 2 25833470.51 0 29916000 I PV PMT FV N Output = 7.61 MIRR = 7.61%. At r = 14%, Inputs 2 23636688.21 0 31578000 I PV PMT FV N Output = 15.58 MIRR = 15.58%. PV costs = $4,400,000 + $25,000,000/(1.14) 2 = $23,636,688.21. TV inflows = $27,700,000(1.14) 1 = $31,578,000. Answers and Solutions: 11  22...
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 Spring '08
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 Net Present Value, PV Costs, TV inflows

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