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NEW QUESTION: 1
Los Angeles Lumber Company (LALC) is considering a project with a cost of $1,000 at time = 0 and inflows of $300 at the end of Years 1 - 5. LALC's cost of capital is 10 percent. What is the project's modified IRR (MIRR)?
A. 12.9%
B. 20.7%
C. 10.0%
D. 15.2%
E. 18.3%
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Tabular/Numerical solution:
TV = $300(FVIFA(10%,5)) = $300(6.1051) = $1,831.53.
$1,000 = TV/(1 + MIRR)