Respuesta :
Answer:
26.78%
Explanation:
The first task is to compute the internal rate of return using the formula below:
IRR=lower rate of interest+NPV at lower rate of interest/(NPV at lower rate of interest-NPV at higher rate of interest)*(higher rate of interest-lower rate of interest)
NPV at 12% lower rate:
NPV=-$225,550+$97,750/(1+12%)^1++$97,750/(1+12%)^2+$97,750/(1+12%)^3+$97,750/(1+12%)^4+$97,750/(1+12%)^5+$97,750/(1+12%)^6= 176,340.07
NPV at 42% (higher rate)
NPV=-$225,550+$97,750/(1+42%)^1++$97,750/(1+42%)^2+$97,750/(1+42%)^3+$97,750/(1+42%)^4+$97,750/(1+42%)^5+$97,750/(1+42%)^6=-21,200.08
IRR=12%+176,340.0/(176,340.0--21,200.08)*(42%-12%)=38.78%
MIRR=(PV of inflows/PV of outflow)^(1/n)*(1+cost of capital)-1
PV of inflows=$97,750/(1+12%)^1++$97,750/(1+12%)^2+$97,750/(1+12%)^3+$97,750/(1+12%)^4+$97,750/(1+12%)^5+$97,750/(1+12%)^6=401890.0659
PV of outflow=225,550
cost of capital=12%
MIRR=(401890.0659 /225,550 )^(1/6)*(1+12%)-1=26.78%
