4. Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumpton other than the project's IRR. Consider the following situation: Cold Goose Metal Warks Inc. is analyzing a project that requires an initial investment of $600,000. The project's expected cash fiows are: Cold Goose Metal Works Inc's WACC is 7%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR): 15.11% 16.79% 18.47% 20.15% Cold Goose Metal Works Incis WACC is 7%, and the project has the same risk as the firm's average project. Caiculate this project's modified interna! rate of return (MIRR): 15.11% 16.795s 18.47% 20.15% If Cold Goose Metal Works inci's managers seiect projects based on the MiRA criterion, they should this independent project. Which of the following statements best describes the difference between the IRR method and the MIRR method? The IRR method assumes that cash flows are reinvested at a rate of return equal to the IRR. The MIRR method assumns that cash flows are reinvested at a rate of return equal to the cost of capital. The IRR method uses the present value of the initial investment to calculate the IRR. The MIRR method uses the terminal value of the initial investment to calculate the MiRR. The IRR. method uses only cash inflows to calculate the IRR. The MiRR method uses both cash inflows and cash outflows to calculate the MIRR. Cold Goose Metal Works Incis WACC is 7%, and the project has the same risk as the firm's average project. Caiculate this project's modified interna! rate of return (MIRR): 15.11% 16.795s 18.47% 20.15% If Cold Goose Metal Works inci's managers seiect projects based on the MiRA criterion, they should this independent project. Which of the following statements best describes the difference between the IRR method and the MIRR method? The IRR method assumes that cash flows are reinvested at a rate of return equal to the IRR. The MIRR method assumns that cash flows are reinvested at a rate of return equal to the cost of capital. The IRR method uses the present value of the initial investment to calculate the IRR. The MIRR method uses the terminal value of the initial investment to calculate the MiRR. The IRR. method uses only cash inflows to calculate the IRR. The MiRR method uses both cash inflows and cash outflows to calculate the MIRR