Watts co. is considering a project that has the following cash flow and cost of capital (r) data. what is the project's mirr? note that a project's mirr can be less than the cost of capital (and even negative), in which case it will be rejected. r = 10.00%year 0 1 2 3 4cash flows −$850 $300 $320 $340 $360a. 14.08%b. 15.65%c. 17.21%d. 18.94%e. 20.83%

MIRR = 15.65%

so correct option is b. 15.65%

Explanation:

solution

We will apply here formula for amount that is

A = P ×      ..................1

here A is future value  and P is present value  and r is rate and n is time period

so here future value of inflows will be

future value of inflows = [ 300 × (1.1)³ ] + [ 320 × (1.1)² ] + [ 340 × (1.1) ] + 360

future value of inflows = $1520.5

and MIRR will be here

MIRR =

MIRR =

MIRR = 15.65%

so correct option is b. 15.65%

answer; ///deficit;