2.) Taylor Technologies has a target capital structure, which is 40% debt and 60% equity. The equity will be financed with retained earnings. The company's bonds have a yield to maturity of 10%. The company's stock has a beta=1.1. The risk-free rate is 6%, the market risk premium is 5%, and the tax rate is 30%. The company is considering a project with the following cash flows:

(see chart in the attached file)

What is the project's modified internal rate of return (MIRR)?

2.) Taylor Technologies has a target capital structure, which is 40%

debt and 60% equity. The equity will be financed with retained earnings.

The companyâs bonds have a yield to maturity of 10%. The companyâs

stock has a beta=1.1. The risk-free rate is 6%, the market risk premium

is 5%, and the tax rate is 30%. The company is considering a project

with the following cash flows:

Year Project Cash Flow

0 -$50,000

1 $35,000

2 $43,000

3 $65,000

4 $-40,000

What is the projectâs modified internal rate of return (MIRR)?

(see chart in the attached file)

What is the project's modified internal rate of return (MIRR)?

2.) Taylor Technologies has a target capital structure, which is 40%

debt and 60% equity. The equity will be financed with retained earnings.

The companyâs bonds have a yield to maturity of 10%. The companyâs

stock has a beta=1.1. The risk-free rate is 6%, the market risk premium

is 5%, and the tax rate is 30%. The company is considering a project

with the following cash flows:

Year Project Cash Flow

0 -$50,000

1 $35,000

2 $43,000

3 $65,000

4 $-40,000

What is the projectâs modified internal rate of return (MIRR)?

## This question was asked on May 16, 2010.

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