Compute the MIRR for Project Y and Accept or Reject

question 35

Multiple Choice

Compute the MIRR for Project Y and accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 12 percent.
$$\begin{array} { | l | c | c | c | c | c | c | } \hline \text { Time: } & 0 & 1 & 2 & 3 & 4 & 5 \\\hline \text { Cash flow: } & - 5,000 & 1,000 & 1,000 & 0 & 2,000 & 2,000 \\\hline\end{array}$$

• A)7.62 percent, accept
• B)7.62 percent, reject
• C)47.09 percent, accept
• D)47.09 percent, reject

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Definitions:

Trust Agreement

A legal document that establishes a trust and outlines how it will be administered and specifies the rights and duties of the parties involved.

Indemnity Contracts

Legal agreements in which one party agrees to compensate another for any loss or damage incurred.

Negligently

The failure to exercise a reasonable standard of care, resulting in damage or harm to another.

Compensation

Compensation refers to the payment or benefit given to employees or workers for their services or to victims for their losses.