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The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash fiows may not necessarily generate a return equal to the IRR. Thus, the modified IRR. approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Green Caterpillar Garden Supplies Inc, is analyzing a project that requires an initial investment of $3,225,000. The projects expected cash flows are: Green Caterpillar Garden Supplies Inc's WACC is 9%, and the project bas the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR): 16.51%20.86%15.64%20.85% If Green Caterpillar Garden Supplies Inc's managers select projects based on the MIRR criterion, they should this independent prolect. Which of the following statements about the relationshlp between the IRR and the MiRR is correct? A typical firm's iRR will be equal to its MIRR. A treical fitm's IRR will be greater than its MiRR. A typical firmis tRR will be less than its MIRR