Computer consultants inc. is considering a project that has the following cash flow and cost of capital (r) data. what is the project's mirr? note that a project's mirr can be less than the cost of capital (and even negative), in which case it will be rejected. r = 10.00%year 0 1 2 3cash flows −$1,000 $450 $450 $450a. 9.32%b. 10.35%c. 11.50%d. 12.78%e. 14.20%

e. 14.20%

Explanation:

We use the formula:

A=P(1+r/100)^n

where

A=future value

P=present value

r=rate of interest

n=time period.

Hence

A=$450(1.1)^2+$450(1.1)^1+$450

=$450[(1.1)^2+(1.1)+1]

=$1489.50

Hence

MIRR=[Future value of inflows/Present value of outflows]^(1/time period)-1

=[1489.5/1000]^(1/3)-1

=14.20%(Approx)(E).

answer; is usually (less than) the socially optimal level of consumption;

turnover

the amount of money taken by a business in a particular period.