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Sir in the MIRR formuls PV r is the pv of the phase of cash inflows…I hvae a doubtt that the inflows dont start until yr 1 and 11840000 is in out flow here so why is it added to calculate the pvr figure? thnaks
Did you attempt the question before looking at the answer? I don’t think you could have done, otherwise you would not be asking this question. You should always attempt the questions first – just auditing the answers is not the right way to use the revision kit or past exam questions.
If you discount the cash flows in the question at 10% then you will arrive at a PV of 14,133.
However, since the question gave you the NPV at 10%, then it is much quicker to simply say that the NPV is the PV of the inflows less the initial cost. Therefore the PV of the inflows must be equal to the initial cost plus the NPV.
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