Ingram Electric Products Is Considering a Project That Has the Following

question 63

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 MIRR can be less than the WACC (and even negative) , in which case it will be rejected.

• A) 8.86%
• B) 9.84%
• C) 10.94%
• D) 12.15%
• E) 13.50%

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Definitions:

Present Dollar

Present Dollar refers to the value of a sum of money in terms of its purchasing power at the current period, not adjusted for inflation or deflation over time.

Equal Payments

Regularly scheduled payments of the same amount over the term of a loan or lease, combining principal and interest components.

Compounded Annually

The process of adding interest to the principal sum of a loan or deposit once every year, resulting in exponential growth.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.