alleryStart learning →Outflows are 1,000 now and 1,100 at year 1; finance rate 10%. PV of outflows?
- 1,900
- 2,000
- 2,100
- 2,200
Show answer and solution
Correct answer: B. 2,000
The year-1 outflow is worth 1,100/1.1 = 1,000 today, so the total is 1,000 + 1,000 = 2,000.
CA Inter Modified Internal Rate of Return — practice questions — page 2
Explore 34 free Modified Internal Rate of Return questions in CA Inter Financial Management. Open each question or exercise to read its content, reference answers and available explanation.
Practise Modified Internal Rate of Return with Quill →Modified Internal Rate of Return questions and exercises with answers
Showing questions 31–34 of 34.
Outflows are 1,000 now and 1,100 at year 1; finance rate 10%. PV of outflows?Read the answer and worked solution →Outflows 1,000 now and 1,100 at year 1 (finance 10%); inflow 2,880 at year 2. MIRR?Read the answer and worked solution →Outlay 2,000 now; inflows 1,100 (yr 1), 1,210 (yr 2); reinvestment 10%. MIRR?Read the answer and worked solution →Terminal value 7,600 and outflow PV 4,636.36 over 3 years give MIRR near?Read the answer and worked solution →
Worked practice questions
Outflows 1,000 now and 1,100 at year 1 (finance 10%); inflow 2,880 at year 2. MIRR?
- 22%
- 44%
- 20%
- 10%
Show answer and solution
Correct answer: C. 20%
PV of outflows is 2,000; 2,880/2,000 = 1.44, whose square root is 1.2, so MIRR = 20%.
Outlay 2,000 now; inflows 1,100 (yr 1), 1,210 (yr 2); reinvestment 10%. MIRR?
- 21%
- 5%
- 10%
- 15%
Show answer and solution
Correct answer: C. 10%
TV = 1,100 x 1.1 + 1,210 = 2,420; 2,420/2,000 = 1.21, square root 1.1, so MIRR = 10%.
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