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Big Company is evaluating two projects, Project A and Project B. Both projects are of equal risk. Big Company has a WACC of 9%. The
Big Company is evaluating two projects, Project A and Project B. Both projects are of equal risk. Big Company has a WACC of 9%. The expected Free Cash Flows of the projects are as follows: Period Annual Cash Flows Project A Annual Cash Flows Project B 0 1 2 ($1,000) 775 275 120 ($1,000) 100 450 3 745 Compute the Modified Internal Rate of Return (MIRR) for Project A Show your work to receive partial credit. The Modified Internal Rate of Return of Project B is 10.64%. If Projects A and B are independent, considering only the MIRR method, which project(s) should Big Company proceed with? Explain your answer. The Modified Internal Rate of Return of Project B is 10.46%. If Projects A and B are mutually exclusive, considering only the MIRR method, which project(s) should Big Company proceed with? Explain your
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