4. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reimvested at the same rate equal to the iak. However in reality the reinvested cash flows may not necessarily generate a return equal to the lPth. Thus, the modified LAR approach mak.s a more reasonsble assumption ocher than the project's 1RR Consider the fellewing situatian: Cold Goove Metal Works Ine. is andlyding a peoject that requires an inital investment or $2,750,000. The project's expected cash flows are: Cold Goose Metal Works-Inci's WACC is 8%, and the project has the same risk as the firm's average project, Calculate this project's modified internal rate of return (MIRR): It Cold Coost Metal Works Inc.s managers select projects based on the Mitut criterien, they should this independent project. Which of the following statements about the relationship between the 1hen and the M1rri is correct? A trpical firm's 1AR will be equal to its MTRR. A tyoical firm's trR will be less than its MI9r. A troical firm's IRk will be greater than its MIRA