Please see attached for question. (MIRR, IRR, Cash Flows). Please let me know if you have any questions.

Investment Decision Rules: Capital Budgeting Methods Suppose you are a capital budgeting analyst for a company considering investments in eight projects listed in Exhibit 1. The company has determined that they can undertake each of these projects and have forecasted the project cash flows from each project in Exhibit 1. The chief financial officer of your company has asked you to rank the projects and recommend the \"four best\" that the company should accept. You will rank the projects based on quantitative decisions alone. No other project characteristics are relevant in the selection, except that management has determined that projects 5 and 6 are mutually exclusive. All other projects are independent. All the projects require the same initial investment, $5 million. Moreover, all are believed to be of the same risk class. Assume that 12% is an appropriate discount rate (some officers of the company have suggested that the discount rate should be higher). Assigned #7 and #8 1. Explain why the MIRR of project #7 is greater than this project's IRR. 2. What could the cash flows of #7 and #8 represent in the real world? 3. Ho would you rank the projects (if possible) 1-7? Exhibit 1 Project Cash Flows (dollars in thousands) Project: Initial cost: Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 2 3 4 5 6 7 8 -5000 -5000 -5000 -5000 -5000 -5000 -5000 -5000 650 650 650 650 650 650 650 650 650 650 650 650 650 650 5000 3,000 1400 840 650 390 235 141 85 51 31 19 11 7 4 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 22000 700 900 915 920 925 930 940 950 960 970 980 990 1000 1100 -5000 2500 1700 900 700 500 300 200 150 100 60 30 20 10 5 5 -550 -50 60 450 800 1100 1350 1500 1625 1725 1810 1885 1935 1975 2000 670 670 670 670 670 670 670 670 670 670 670 670 670 670 670 625 625 625 625 625 625 625 625 625 625 625 625 625 625 5625