Malholtra Inc A) 1445%
B) 12

question 22

Multiple Choice

Malholtra Inc.is considering a project that has the following cash flow and WACC data.What is the project's MIRR? Note that a project's projected MIRR can be less than the WACC (and even negative) ,in which case it will be rejected. $$\begin{array} { l c c c c c } \text { WACC: } & { 10.00 \% } \\\text { Year } & 0 & 1 & 2 & 3 & 4 \\\hline \text { Cash flows } & - \$ 975 & \$ 300 & \$ 320 & \$ 340 & \$ 360\end{array}$$

• A) 14.45%
• B) 12.92%
• C) 12.57%
• D) 11.28%
• E) 11.75%

---

Definitions:

Income Elasticity

An assessment of the variation in consumer demand for a product or service based on fluctuations in the consumer's income.

Consumer Income

The total income that consumers have available to spend on goods and services, after taxes and other deductions.

Normal Goods

Goods for which demand increases as consumer income rises, and decreases as consumer income falls.

Income Elasticity

A measure of how the demand for a good or service changes in response to changes in consumers' income.