june 2012 exam question 1 MIRR

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October 26, 2012 at 3:31 pm #54886
ferrischan
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How is it that in the ACCA model answer, they considered the PV of Investment and Returns with 4.5% and also how come in calcualtion the MIRR, they do not take into consideration the cost of capital of 12.5%? Please assist. Thanks
October 26, 2012 at 5:09 pm #106074
Ken Garrett
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I think it should be at 12.5%, the WACC. The rationale is that receipts can be invested at this rate, rather than just being put on deposit at 4.5%. You might like to send a question to ACCA about it.
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