Ehrmann Data Systems Is Considering a Project That Has the Following

question 72

Short Answer

Ehrmann Data Systems 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. WACC: $\quad 10.00 \%$
$\begin{array}{c}\begin{array}{lll} \text {Year}\\\text {Cash flows}\end{array}\begin{array}{c} 0 \\\hline -\$1,000\end{array}\begin{array}{c}1 \\\hline \$450\end{array}\begin{array}{c}2 \\\hline \$450\end{array}\begin{array}{c}3 \\\hline \$450\end{array}\end{array}$

a. $9.32 \%$
b. $10.35 \%$
c. $11.50 \%$
d. $12.78 \%$
e. $14.20 \%$

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Definitions:

Lack of Food

A situation where there is an insufficient supply of food to meet the nutritional needs of a population.

Loyal to British

Refers to individuals or groups who remained faithful to the British Crown, especially during key historical periods such as the American Revolutionary War.

Total Population

The complete count of all individuals within a specified territory, including citizens, non-citizens, and all demographic groups.

African Americans

A racial or ethnic group in the United States with ancestry from the black racial groups of Africa, impacted by a history of slavery, segregation, and ongoing social and economic inequalities.