Discounting approach and reinvestment approach

Assignment Help Financial Management

Reference no: EM131354274

Mittuch Corp. is evaluating a project with the following cash flows. The company uses a discount rate of 8 percent and a reinvestment rate of 5 percent on all of its projects.

Year Cash Flow

0. –$ 15,300

1. 6,400

2. 7,600

3. 7,200

4. 6,000

5. –3,400

Calculate the MIRR of the project using all three methods with these interest rates.

Discounting approach ______%

Reinvestment approach _____%

Combination approach ______%

Reference no: EM131354274

Questions Cloud

What are two other ways swiss air might hedge : On January 2d, 2017, Boeing expects to send 5 787s from its plant in Seattle, WA to Swiss Air, which it will sell on 270-day terms at $125 million each. Thus Boeing will receive payment from Swiss Air on September 27th, 2017. What are two other ways ..

The discount rate can best be described as : The discount rate can best be described as; How long will it take $10,000 to reach $50,000 if it earns 10% interest compounded semi-annually?

The total gain or loss on constructive retirement of debt : Pallet Corporation owns 90% of the outstanding common stock of Stealth Company. On January 1, 2014, Stealth Company issued $500,000, 12%, ten-year bonds. On January 1, 2016, Pallet Corporation paid $412,000 for Stealth Company bonds with a par value ..

Determine the value of that sum today : You are to recieve $12,000 at the end of 5 years. The available yield on investments is 6%. Which table would you use to determine the value of that sum today?

Discounting approach and reinvestment approach : Mittuch Corp. is evaluating a project with the following cash flows. The company uses a discount rate of 8 percent and a reinvestment rate of 5 percent on all of its projects. Calculate the MIRR of the project using all three methods with these inter..

Find the price of a put option on the stock : Draw and label a tree that shows the price of the stock today, after 6-months and after 1 year. Find the price of such a call option when the 6-month risk-free interest rate is 2 percent. Find the price of a put option on the stock with the same exer..

Find the outstanding balance just after making the payment : Suppose a family borrows $101000 on a home for 25 years at 8.1% compounded monthly. Find the monthly payments rounded up to the next cent. Find the outstanding balance just after making the 60th payment.

Time value of money is important to financial decision : The concept of time value of money is important to financial decision making because;

Using the home currency approach-what is net present value : You are analyzing a very low-risk project with an initial cost of €120000. The project is expected to return €40000 the first year, €50000 the second year and €60000 the third year. The current spot rate is €.54. The nominal return relevant to the pr..

User Account

All Pages