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The Caffeine Coffee Company uses the modified internal rate of return. The firm has a cost of capital of 12 percent. The project being analyzed
The Caffeine Coffee Company uses the modified internal rate of return. The firm has a cost of capital of 12 percent. The project being analyzed is as follows ($27,000 investment): Year Cash Flow 1 .................... $15,000 2 .................... 12,000 3 .................... 9,000 What is the modified internal rate of return? An approximation from Appendix B is adequate for the final answer. (You do not need to interpolate.) Assume the traditional internal rate of return on the investment is 17.5 percent. Explain why your answer in part a would be lower
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