Ingram Electric Products Is Considering a Project That Has the Following

question 67

Multiple Choice

Ingram Electric Products 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. $$\begin{array} { l c c c c } \text { WACC: } & 7.00 \% & & & \\\text { Year } & 0 & 1 & 2 & 3 \\\hline \text { Cash flows } & - \$ 800 & \$ 350 & \$ 350 & \$ 350\end{array}$$

• A) 14.93%
• B) 10.00%
• C) 12.04%
• D) 13.97%
• E) 9.15%

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Definitions:

Private Consumption

The spending on goods and services by households for their own use.

Floating Exchange Rate

A currency system where the value of a currency is allowed to fluctuate according to the foreign exchange market.

Discount Rate

The interest rate a central bank charges commercial banks to borrow money.

Premium Rate

Refers to the higher price or rate charged for goods or services perceived to be of higher quality, or in the case of telecommunications, services that offer added value beyond the basic rate.