Harley worked for many years to save enough money to start his own residential landscape design business. The net cash flows shown are those he recorded for the first 6 years as his own boss. Find the external rate of return using the modified rate of return approach with a reinvestment rate of 15% per year and a borrowing rate of 8%. Additionally, after using the procedure, use the MIRR function to confirm your answer. Year NCF, $ 0 1 -9,000 4,100 The external rate of return is The spreadsheet function is 2 -4,000 3 -7,000 % per year. =RATE(6,-17986,,25972) ► 4 5 12,000 700 6 1,050

Harley worked for many years to save enough money to start his own residential landscape design business. The net cash flows shown are those he recorded for the first 6 years as his own boss. Find the external rate of return using the modified rate of return approach with a reinvestment rate of 15% per year and a borrowing rate of 8%. Additionally, after using the procedure, use the MIRR function to confirm your answer. Year NCF, $ 0 1 -9,000 4,100 The external rate of return is The spreadsheet function is 2 -4,000 3 -7,000 % per year. =RATE(6,-17986,,25972) ► 4 5 12,000 700 6 1,050

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 15M

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Harley worked for many years to save enough money to start his own residential landscape design business. The net cash flows shown are those he recorded for the first 6 years as his own boss. Find the external rate of return using the modified rate of return approach with a reinvestment rate of 15% per year and a borrowing rate of 8%. Additionally, after using the procedure, use the MIRR function to confirm your answer. Year 10 NCF, $ -9,000 4,100 The external rate of return is 2 -4,300 % per year. 5 -7,000 12,000 700 Saved The spreadsheet function is (Click to select) (Click to select) =RATE(6, 26122,-18243) =RATE(6,26122,,-18243) =RATE(6,-18243,26122) =RATE(6,-18243, 26122) 6 1,200
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