Question

How is the terminal value (TV) of the Cash inflows expected from the project calculated in the Modified Internal Rate of Return (MIRR) method?

a.

TV = Σ Cash Outflow_t / (1 + r)^t

b.

TV = Σ Cash Outflow_t * (1 + r)^t

c.

TV = Σ Cash Outflow_t * (1 + MIRR)^t

d.

TV = Σ Cash Outflow_t / (1 + MIRR)^t

Answer: (a).TV = Σ Cash Outflow_t / (1 + r)^t Explanation:The terminal value (TV) of the Cash inflows expected from the project in the MIRR method is calculated using the formula TV = Σ Cash Outflow_t / (1 + r)^t.

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Q. How is the terminal value (TV) of the Cash inflows expected from the project calculated in the Modified Internal Rate of Return (MIRR) method?

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