Answer to question 5:

Year

Cash inflows

FVIF @ 27%

FV

$370,000

2.0483

$757,871

$270,000

1.6129

$435,483

$155,000

1.27

$196,850

$49,000

$49,000

TERMINAL VALUE OF CASH

INFLOWS

$1,439,204

MIRR is calculated to determine the rate at which the present value of a projects outflow equals
the terminal value of the inflows. Trying at 35% and 25%, we get

PVIF@35

PV

PVIF@25

PV

Present Value
of Terminal
Cash Inflow

$1,439,204

O.3011

$433,344.32

0.4096

$589,497.96

Present Value
of Outflow

$500,000

$500,000

$500,000

NPV

$(66,655.68)

$89,497.96