A key to resolving the NPV and IRR conflict is through the assumed reinvestment rate. The NPV calculation implicitly assumes that intermediate cash flows are reinvested at the and the IRR calculation assumes that the rate at which cash flows can be reinvested in the As a result, when evaluating mutually exclusive projects, the is usually the better decision criterion 9. Cash flow patterns and the modified internal rate of return calculation Sharp Manufacturing to analyzing a project with the following projected cash towe: Year O 1 Cash Flow $1,180,000 275,000 400,000 450,000 320,000 2 4 This project exhibits cash flows Sharp's desired rate of return is 6.00%. Given the cash flows expected from the company's new project, compute the project's anticipated modified internal rate of return (MIRR). (Hint: Round all dollar amounts to the nearest whole dollar, and your final Mire value to two decimal places: 7.21 301 8.81% 9.61 Sharps managers are generally conservative and select projects based solely on the projects moaned internax rate or return (s). Soome company's managers accept this independent project? OND Yes You've just teamed that the analyst who assembled the project's projected cash flow information used incorrect data. You Ve reexamined the source data and determined that the revised annual cash flow Information should be Year 0 Cash Flow -$998,750 275,000 300.000 . 2 360,000 240,000 4 Again, if Sharp's desired rate of return : 6,009, then the project's revised modified Internal rate of return (MIRR) should be Round all dollar amounts to the nearest while dollar, and your fina MIRR valve to two decimal places:) 3t, again, Sharp's managers continue to exhibit their general conservatism and select their investment projects based only on the project's MIRR should the accept the rolet