The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the TRR. Thus, the modified the approach makes a more reasonable assumption other than the project's TRR. Consider the following situation: Fuzzy Button Clothing Company is analyzing a project that requires an initial investment of $2,750,000. The project's expected cash flows are: Year Year 1 Year 2 Year 3 Year 4 Cash Flow $375,000 - 100,000 400,000 400,000 Fuzzy Button Clothing Company's WACC is 7%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR): 17.349 -17.93% 22.76% O 20.60