A company has the following projected cash flows for an investment. What is the Modified Internal Rate of Return (MIRR) if the financing rate is 5% and the reinvestment rate is 8%?

Cash Flows:

• Year 0: -$40,000
• Year 1: $10,000
• Year 2: $15,000
• Year 3: $20,000
• Year 4: $25,000

Requirements:

1. Calculate the MIRR.
2. Determine how MIRR differs from IRR.
3. Assess if MIRR provides a better decision-making tool than IRR.
4. Evaluate the project’s viability based on MIRR.