Cash Flow	Nano Test Tubes	Microsurgery Kits
Investment	-$ 11,000	-$ 11,000
Cash flow year 1	$ 2,000	$ 4,000
Cash flow year 2	$ 3,000	$ 4,000
Cash flow year 3	$ 4,000	$ 4,000
Cash flow year 4	$ 5,000	$ 4,000
Cash flow year 5	$ 7,000	$ 4,000

Compute the modified internal rate of return for each project.

1. Explain the rationale behind the MIRR method.
2. Stated and explain the decision rule for MIRR method. Assume a hurdle rate of 9%.
3. Explain how the company would use the MIRR method to rank mutually exclusive project.

Explain how this method corrects for some of the problems inherent in the IRR method.