Question
Jackson Inc. is considering two mutually exclusive, equally risky projects S and L. Their cash flows are shown below. The CEO believes the IRR is
Jackson Inc. is considering two mutually exclusive, equally risky projects S and L. Their cash flows are shown below. The CEO believes the IRR is the best selection criterion, while the CFO advocates for the NPV method. What is the modified IRR (MIRR) for project S?
| WACC: | 7.50% | ||||
| Year | 0 | 1 | 2 | 3 | 4 |
| CFS | -$1,100 | $550 | $600 | $100 | $100 |
| CFL | -$2,700 | $650 | $725 | $800 | $1,400 |
|
| 9.67% |
|
| 10.05% |
|
| 10.29% |
|
| 9.55% |
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Production And Operations Analysis
Authors: Steven Nahmias
6th Edition
0073377856, 9780073377858
