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Sagot :
Answer:
B
Explanation:
The modified internal rate of return is a capital budgeting method used to determine the profitability of an investment. The MIRR assumes that cash inflows are reinvested at the firm's cost of capital and outflows are financed at the firm's financing cost.
MIRR = (Future value of a firm's cash inflow / present value of the firm's cash outflow)^ (1/n) - 1
n = number of years
present value of the firm's cash outflow = $200,000
Future value of a firm's cash inflow
Future value of year 1's cash flow = 50,000 x (1.12^3) = $70,246.40
Future value of year 2's cash flow = 50,000 x (1.12^2) = $62,720
Future value of year 3's cash flow = 80,000 x (1.12^1) = $89.600
Future value of year 1's cash flow = $100,000
Add the future values together = $322566.40
($322566.40 / $200,000)^0.25 - 1 = 12.7%
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