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# Dunder Mifflin Paper Company is considering purchasing a new stamping machine that costs \$400000 This new machine will produce cash inflows of \$100000 each year at the end of years 1 through 5 the

Dunder Mifflin Paper Company is considering purchasing a new stamping machine that costs \$400,000. This new machine will produce cash inflows of \$100,000 each year at the end of years 1 through 5, then at the end of year 7 there will be a cash outflow of \$250,000. The company has a weighted average cost of capital of 11% ( use this as the reinvestment rate), What is the MIRR of the investment?

2. Artie's Wrestling Stuff is considering building a new plant. This plant would require an initial cash outlay of \$8 million and will generate annual free cash inflows of \$1 million per year for 8 years. Calculate the project's MIRR given:A) A required rate of return of 10% B) A required rate of return of 13% C) A required rate of return of 14%

3. Calculate the MIRR given the following casg flows if the appropriate required rate of return is 12%(use this as the investment rate)

 Year Cash Flow 0 -40000 1 35000 2 35000 3 35000 4 -35000 5 35000 6 35000

4. You are considering a project with the following cash flows:

 Year Cash Flow 0 -60000 1 25000 2 25000 3 25000 4 25000

If the appropriate discount rate is 8%, what is the projects discounted payback period?

 5. Your investment advisor has offered you an investment that will provide you with one cash flow of \$152,000 at the end of 35 years if you pay premiums of \$250 per year at the end of each year for 35 years. Find the internal rate of return on this investment.

May 21 2020 View more View Less