Computer Consultants Inc A) 932%
B) 10

question 5

Multiple Choice

Computer Consultants Inc.is considering a project that has the following cash flow and cost of capital (r) data.What is the project's MIRR? Note that a project's MIRR can be less than the cost of capital (and even negative) , in which case it will be rejected. $$\begin{array} { l c c c c } \mathrm { r } = 10.00 \% \\\text { Year } & 0 & 1 & 2 & 3 \\\hline \text { Cash flows } & - \$ 1,000 & \$ 450 & \$ 450 & \$ 450\end{array}$$

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Definitions:

Real Rate of Return

The rate of profit or growth rate after adjusting for inflation.

Nominal Rate

The interest rate before adjustments for inflation, as opposed to the real rate, which is adjusted for inflation.

Inflation

How quickly the average price of goods and services elevates, lessening the power to purchase.

APR

Annual Percentage Rate, the annual rate charged for borrowing or earned through an investment, which includes all fees and costs associated with the transaction.