Would you make the? investment

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The Dunder Muffin Company is considering purchasing a new commercial oven that costs ?$320 comma 000. This new oven will produce cash inflows of ?$165 comma 000 at the end of Years 1 through 10. In addition to the cash? inflows, at the end of Year 5 there will be a net cash outflow of ?$245 comma 000. The company has a weighted average cost of capital of 11.8 percent. What is the MIRR of the? investment? Would you make the? investment? Why or why? not? Note that we discounted the? project's negative cash flows back to the present using the? project's required rate of return and then computed the MIRR from the modified cash flows.

The MIRR of the investment with a discount rate of 11.8?% is? (Round to two decimal? places.)

Would you make the? investment? Why or why? not? ?(Select the best choice? below.)

A. ?Yes, the project is worthwhile based on this measure because the MIRR is greater than the discount rate.

B. ?Yes, the project is worthwhile based on this measure because the MIRR is less than the discount rate.

C. ?No, the project is not worthwhile based on this measure because the MIRR is greater than the discount rate.

D. ?No, the project is not worthwhile based on this measure because the MIRR is less than the discount rate.

Reference no: EM132288989

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