3 . Cash flow patterns and the modified rate of return calculation

Savory Seafood Inc. is analyzing a project with the following cash flows:

Year	Cash Flow
0	-$1,720,000
1	$300,000
2	$500,000
3	$600,000
4	$400,000

This project has ( normal, nonnormal ) cash flows.

Savory Seafood Inc.s WACC is 5.00%. What is this projects modified internal rate of return (MIRR).

2.90%

1.90%

5.89%

4.90%

Savory Seafood Inc.s managers select projects based only on the MIRR criterion. Should Savory Seafood Inc.s managers accept this independent project?

Yes

No