Polk Products is considering an investment project with the following cash flows:

	Year 0	Year 1	Year 2	Year 3
Cashflow	-100	70	-30	60

The companys cost of capital is 9%, and it can get an unlimited amount of capital at that cost. What is the modified internal rate of return (MIRR) for the Project?

Select one:

a. 9.50%

b. 8.43%

c. 6.03%

d. 4.56%

e. 7.48%

Which of the projects will the company accept?

					(a) No budget limitation	(b) subject to budget
Project	Required investment (in millions)	Rate of Return	Risk-adjusted WACC	Excess Return	Ranking	Available Capital	Ranking
A	$300	16.0%
B	400	15.5
C	400	12.0
D	100	11.7
E	100	10.0
F	200	9.0
G	350	8.5

Except for projects F and G are mutually exclusive, all the other projects are independent. Project A and C are high-risk project; project B and E are average-risk projects; while project D, F, and G are low-risk project. The company estimates that its WACC is 9%. The company adjusts for risk by adding 3 percentage points to the WACC for high-risk projects, and subtracting 3 percentage points from the WACC for low-risk projects. The company has a limited capital budget at $900.

Select one:

a. A, B, D, E

b. B, C, E

c. A, B, F

d. B, D, G

e. B, C, E, F