Compute the MIRR Statistic for Project J and Advise Whether

question 68

Multiple Choice

Compute the MIRR statistic for Project J and advise whether to accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent.
$$\begin{array} { l c c c c c c } \text { Time } & 0 & 1 & 2 & 3 & 4 & 5 \\\text { Cash Flow } & - \$ 1,000 & \$ 300 & \$ 1,480 & - \$ 500 & \$ 300 & - \$ 100 \\\hline\end{array}$$

• A) The project's MIRR is 14.77 percent and the project should be accepted.
• B) The project's MIRR is 9.29 percent and the project should be rejected.
• C) The project's MIRR is 13.76 percent and the project should be accepted.
• D) The project's MIRR is 15.31 percent and the project should be accepted.

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Definitions:

Credit Manager

A professional responsible for managing a company's credit policies and ensuring customers meet their debt obligations.

Accounts Receivable Balance

The cumulative financial obligation customers have towards a company for goods or services received but not yet remunerated.

Accounts Receivable Balance

The total amount of money owed to a company by its customers for goods or services delivered on credit.

Source Of Cash

Refers to activities or transactions that increase the cash balance, including operating activities, financing, and investing.