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4. Modifled internal rate of return (MIRR) The IRR evaluation method assumes that cash fows from the profect are reinvested at the same rate equal

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4. Modifled internal rate of return (MIRR) The IRR evaluation method assumes that cash fows from the profect are reinvested at the same rate equal to the IRR. However, in realry the reinvested cash flows may not necessanily generate a reciurn equal to the IRR. Thus, the modified IRR approach makes a more reasonabie assumption cther than the project's 1R. Consider the following sltuation: Green Caterpillar Garden Supplies inc, is analyzing a project that requires an intiat investment of $2,500,000. The project's expected cash flows are: Green Caterpalar Garden Supplies Inc,'s WACC is 946 , and the project has the same risk as the firm's average project. Cakculate this project's modifled internal rate of return (MiRR): 22.31% 18.06% 15.88% 20.19% If Green Caterpillar Garden Supplies Inci's managers select projects based on the MIPR criterion, they should this independent project. Which of the following statements about the relationship between the Ihat and the Mash is correct? A trpical firm's 190 will te greater than its Mina. Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment of $2,500,000. The project's expected cash. flows are: Green Caterpalar Garden Supplies Inc.'s WACC is 9%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR): 22.31% 18.06% 15.88% 20.19% If Green Caterpillar Garden Supplies Inc.'s managers select projects based on the MIRR criterion, they should this independent project. Which of the following statements about the relationship between the IRR and the MIRR is correct? A typical firm's IRR will be greater than its MIRR. A typical firm's IRR will be equal to its MIRR. A typical firm's IRR will be less than its MIRR

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