Problem 12-21 Modified internal rate of return [LO4]

The Caffeine Coffee Company uses the modified internal rate of return. The firm has a cost of capital of 13 percent. The project being analyzed is as follows ($32,000 investment): Use Appendix A and Appendix Bfor an approximate answer but calculate your final answer using the formula and financial calculator methods.

Year	Cash Flow
1	$	15,000
2		12,000
3		10,000

a.	What is the modified internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Internal rate of return

%