(10–11)

MIRR and NPV Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below:

Year X Y 0 −$1,000 −$1,000 1 100 1,000 2 300 100 3 400 50 4 700 50 The projects are equally risky, and their cost of capital is 12%. You must make a recommendation, and you must base it on the modified IRR (MIRR). Which project has the higher MIRR?