0 1 2 3 4 5 6

Fixed Cap Inv -50000

sales 10000 12000 14400 17280 20736 24883.2
Fixed Cost -120 -120 -120 -120 -120 -130
Variable Cost -3000 -3600 -4320 -5184 -6220.8 -9953.28
EBITDA 6880 8280 9960 11976 14395.2 14799.92
Less: Depreciation -5000 -5000 -5000 -5000 -5000 -5000
EBIT 1880 3280 4960 6976 9395.2 9799.92
tax -470 -820 -1240 -1744 -2348.8 -2449.98
EAT 1410 2460 3720 5232 7046.4 7349.94
Add: Depreciation 5000 5000 5000 5000 5000 5000
Working capital -1000 2000 2400 2880 3456 4147.2 4976.64
Less: Incremental working capital 1000 400 480 576 691.2 829.44
Salvage Value
Working capital recovery
Total Cash flows -51000 5410 7060 8240 9656 11355.2 11520.5

NPV ₹ 21,413.14

NPV 21413.1447984
MIRR is the discount rate which causes
the PV of a project’s terminal value (TV)
to equal the PV of costs.
 TV is found by compounding inflows at
cost of capital.
 Thus, MIRR assumes cash inflows are
reinvested at cost of capital.
MIRR correctly assumes reinvestment at
opportunity cost = cost of capital. MIRR
also avoids the problem of multiple IRRs.
 Managers like rate of return comparisons,
and MIRR is better for this than IRR.
 7 8 9 10

29859.84 35831.81 42998.17 51597.8

-130 -130 -130 -130
-11943.94 -14332.72 -17199.27 -20639.12
17785.9 21369.08 25668.9 30828.68
-5000 -5000 -5000 -5000
12785.9 16369.08 20668.9 25828.68
-3196.476 -4092.271 -5167.225 -6457.171
9589.428 12276.81 15501.68 19371.51
5000 5000 5000 5000
5971.968 7166.362 8599.634 10319.56
995.328 1194.394 1433.272 1719.927
112.5 Salvage value after capital gain tax.
10319.56
13594.1 16082.42 19068.4 33083.65
ectly assumes reinvestment at Strengths:
ty cost = cost of capital. MIRR  Provides an indication of a project’s risk
s the problem of multiple IRRs. and liquidity.
rs like rate of return comparisons,  Easy to calculate and understand.
is better for this than IRR.  Weaknesses:
 Ignores CFs occurring after the payback
period.