Dry-Sand Company Is Considering Investing in a New Project

question 25

Multiple Choice

Dry-Sand Company is considering investing in a new project.The project will need an initial investment of $1,200,000 and will generate $600,000 (after-tax) cash flows for three years.However,at the end of the fourth year,the project will generate -$500,000 of after-tax cash flow due to dismantling costs.Calculate the MIRR (modified internal rate of return) for the project if the cost of capital is 15%.

• A)8.1%
• B)12.6%
• C)28.2%

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