Simson and Simpson, Inc. has an investment proposal with the following characteristics ($ millions):

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RAILROAD PROJECT

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PeriodInvestmentCash Flows

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0$100,000 -

1 $40,000

2 $20,000

3 $(10,000)

4 $20,000

5 $40,000

Compute its net present value (NPV), internal rate of return (IRR) and modified internal rate of return (MIRR). Wherever necessary, assume a discount rate of 5%. Should the project be accepted, why? (4+4+4+3)

5. Simson and Simpson, Inc. has an investment proposal with the following characteristics (\$ millions): Compute its net present value (NPV), internal rate of return (IRR) and modified internal rate of return (MIRR). Wherever necessary, assume a discount rate of 5%. Should the project be accepted, why? (4+4+4+3)