Internal rate of return and modified internal rate of return. Lepton Industries has three potential? projects, all...

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Finance

Internal rate of return and modified internal rate ofreturn. Lepton Industries has three potential? projects,all with an initial cost of ?$1,700,000. Given the discount rateand the future cash flows of each? project, what are the IRRs andMIRRs of the three projects for Lepton? Industries?
??Cash Flow
Project Q
Project R
Project S
??Year 1
? $400,000
?$600,000
?$900,000
??Year 2
?$400,000
?$600,000
?$700,000
??Year 3
?$400,000
?$600,000
?$500,000
??Year 4
?$400,000
?$600,000
?$300,000
??Year 5
?$400,000
?$600,000
?$100,000
??Discount rate
9?%
14?%
18?%
What is the IRR for project? Q?_____%?(Round to two decimal?places.)
What is the MIRR for project? Q?%?(Round to two decimal?places.)
What is the IRR for project? R?%?(Round to two decimal?places.)
What is the MIRR for project? R?%(Round to two decimal?places.)
What is the IRR for project? S?_?%?(Round to twodecimal? places.)
What is the MIRR for project? S?____?% ?(Round to twodecimal? places.)

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4.1 Ratings (688 Votes)

Answer 1 Calculation of IRR of project Q Year Cash flow 0 170000000 1 40000000 2 40000000 3 40000000 4 40000000 5 40000000 IRR of Project Q IRRB5B10 IRR of Project Q 567 Calculation of Modified Internal rate of return MIRR of Project Q MIRR Future value of cash inflows Present value of cash outflows1n 1 Future value of cash inflows Year Cash inflows Future value factor 9 Future value 0 000 1538623955 000 1 See Answer

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Transcribed Image Text

Internal rate of return and modified internal rate ofreturn. Lepton Industries has three potential? projects,all with an initial cost of ?$1,700,000. Given the discount rateand the future cash flows of each? project, what are the IRRs andMIRRs of the three projects for Lepton? Industries???Cash FlowProject QProject RProject S??Year 1? $400,000?$600,000?$900,000??Year 2?$400,000?$600,000?$700,000??Year 3?$400,000?$600,000?$500,000??Year 4?$400,000?$600,000?$300,000??Year 5?$400,000?$600,000?$100,000??Discount rate9?%14?%18?%What is the IRR for project? Q?_________%?(Round to two decimal?places.)What is the MIRR for project? Q?________%?(Round to two decimal?places.)What is the IRR for project? R?________%?(Round to two decimal?places.)What is the MIRR for project? R?________%(Round to two decimal?places.)What is the IRR for project? S?_________?%?(Round to twodecimal? places.)What is the MIRR for project? S?________?% ?(Round to twodecimal? places.)

??Cash Flow	Project Q	Project R	Project S
??Year 1	? $400,000	?$600,000	?$900,000
??Year 2	?$400,000	?$600,000	?$700,000
??Year 3	?$400,000	?$600,000	?$500,000
??Year 4	?$400,000	?$600,000	?$300,000
??Year 5	?$400,000	?$600,000	?$100,000
??Discount rate	9?%	14?%	18?%