forest is purchased for $1,500,000 by a lumber company. They plan to cut down trees and turn them into lumber. Their estimated cash flows are:

End of Year	1	2	3	4
Cashflow	$600,000	$800,000	$900,000	-$150,000

The negative cash flow at the end of year 4 is the cost of replanting the land. The cost of capital is i = 8%, while the reinvestment rate is i = 6%.

What is the modified internal rate of return, MIRR, of this project?

• A.

  13.09%

• B.

  12.37%

• C.

  11.03%

• D.

  10.75%