) Assuming a 9% cost of capital, find the modified internal rate of return for thefollowing cash flows:a. 19.78%b. 6.95%c. 13.64%d. 7.86%Year Cash Flow0123-$175$167$240-$120

YearsCash Flows0($175)1$1672$2403($120)Cost of Capital9%Required :Modified internal rate of return=?

Answered: Assuming a 9% cost of capital, find the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Assuming a 9% cost of capital, find the modified internal rate of return for the following cash flows: a. 19.78% b. 6.95% c. 13.64% d. 7.86% Year Cash Flow 0 1 2 3 -$175 $167 $240 -$120