Wiley's Wire Products Is Considering a Project That Has the Following

question 32

Multiple Choice

Wiley's Wire 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. $$\begin{array} { l c c c c } \text { WACC: } & 11.00 \% & & & \\\text { Year } & 0 & 1 & 2 & 3 \\\text { Cash flows } & - \$ 800 & \$ 350 & \$ 350 & \$ 350\end{array}$$

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

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Definitions:

Pearson's Coefficient

A measure of the linear correlation between two variables, ranging from -1 to 1, where 1 means a perfect positive linear relationship and -1 a perfect negative linear relationship.

Spearman Rank

A rank correlation metric that is non-parametric and evaluates the extent to which two variables' association can be explained through a monotonic function.

Pearson Correlation

A statistical coefficient expressing the degree of linear relationship between two variables, measured on a scale from -1 to 1.

Ranking Data

A method of organizing data by assigning an ordinal or rank order to different values based on their size or importance.