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MIRR calculation) ​Emily's Soccer Mania is considering building a new plant. This project would require an initial cash outlay of ​$10.2 million and would generate annual cash inflows of ​$3.2 million per year for years one through four. In year five the project will require an investment outlay of ​$5.2 million. During years 6 through 10 the project will provide cash inflows of ​$5.2 million per year. Calculate the​ project's MIRR, given a discount rate of 8 percent.'

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Answer:

The project's MIRR is 14.54% as found in the attached

Explanation:

The MIRR which is the modified internal rate of return can be computed using excel formula MIRR which stated thus:

=MIRR(values,finance_ rate,reinvest_rate)

values are the cash flows both inflows and outflows derivable from the projects such as $10.2 million in year 1,$3.2 million in the first four years as well as the $5.2 million cash outflow in year 5 and the $5.2 inflows from year six onward.

The finance rate and reinvest rate are same as the discount rate of 8%.

Eventually,the MIRR gave 14.54% as computed in the attached spreadsheet.

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