Axis Chemical Co. is analyzing a project that requires an initial investment of $2,225,000. The projects expected cash flows are:

Year	Cash flow
Year 1	$375,000
Year 2	-150,000
Year 3	475,000
Year 4	425,000

1. Axis Chemical Co.s WACC is 7%, and the project has the same risk as the firms average project. Calculate this projects modified internal rate of return (MIRR):

a. 21.81%

b. 24.53%

c. -12.32%

d. 29.99%

2. If Axis Chemical Co.s managers select projects based on the MIRR criterion, they should ___________this independent project.

a. reject

b. accept

3. Which oft the following statements about the relationship between IRR and the MIRR is correct?

a. A typical firms IRR will be greater than its MIRR.

b. A typical firms IRR will be equal to its MIRR.

c. A typical firms IRR will be less than its MIRR.

show how you got your answer. thanks