1) Use the following information to calculate the Modified Internal Rate of Return for XYZ Co's. Project A. XYZ Co's. WACC is 12%. (9 Points) Year Calculate PV of CF's WACC = 12% Incremental Cash Flow (1,000) -$15,000 Calculate FV of (+) CFs to Year 6 WACC = 12% 0 $5,000 2. $5,500 $5,200 4 $4,800 5 $4,500 Totals (2) Assume a 14% RRR, calculate the MIRR from the above? N 1/Y = MIRR PV PMT FV (3) Based on the MIRR above, should they accept Project A? Why? (3 Points) (4) What is the plif the WACC IS 12%? Profitability Index tells us the ratio of the PV of Future CFs to the initial Investment or in other words $'s returned in PV terms for each $ of initial Investment. (4 Points) PV of Future CF's PL = = 11 Initial Investment PV of Future CF's PI = 11 11 Initial Investment (5) Based on the Pl above, should they accept Project A? Why? (3 Points)