Mass Company Is Investing in a Giant Crane

question 52

Multiple Choice

Mass Company is investing in a giant crane.It is expected to cost $6.0 million in initial investment,and it is expected to generate an end-of-year cash flow of $3.0 million each year for three years.At the end of the fourth year,there will be a $1.0 million disposal cost.Calculate the MIRR for the project if the cost of capital is 12%.

• A)17.8%
• B)15.3%
• C)23.8%

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Definitions:

Ordinary Shareholders

Investors who own ordinary shares in a company, granting them rights to dividends and voting in company affairs.