Cold Goose Metal Works Inc. is analyzing a project that requires an initial investment of $2750000. expected cash flows are

year 1 275000

year 2 -125000

year 3 475000

year 4 425000

1. cold goose metal works inc wacc is 7% and the project has the same risk as the firms averge project. calculate this project modified internal rate of return (MIRR)

possible answers

21.17

-18.36

16.13

19.15

2. if managers slect projects based on the MIRR criterion they should

accept or reject

the independent project

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

A typical firm's IRR will be greater than its MIRR

A typical firm's IRR will be less than its MIRR

A typical firm's IRR will be equal to its MIRR