M
G
M
T
5
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CF0=-500, CF01=300, CF02=700, CF03=600
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I=10%, NPV=?(802.03), IRR=77.21
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PV of future CF (CF0=0, CF01=300, CF02=700,
CF03=600, I=10%, NPV=? (1302.03). PI=1302.03/500.
Computing MIRR
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Reinvest all interim cash-flows till project end.
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PV=300, N=2, I=10%, PMT=0, FV=? (363)
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PV=700, N=1, I=10%, PMT=0, FV=? (770).
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Total Value at Year 3=363+770+600=1733
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Invest 500 today, get 1733 in 3 years.
What is our return?
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PV=-500, N=3, PMT=0, FV=1733, I=? (51.34)
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CF0=-500, CF01=0, F01=2, CF02=1733, IRR=? (51.34)
In a similar way, for project 2
NPV=1037.57, IRR=31.98, PI=1.5, MIRR=26.44
(since CF are reinvested at a lower rate than IRR, MIRR is < IRR)