The IRR. evalustion method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested eash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situstion: Blue Lama Mining Company is analyzing a project that requires an initial investment of $3,000,000. The project's expected eash flows are: Blue Lama Mining Company's WACC is g\%, and the project has the same risk as the firm's average project. Caleulate this project's modified internal rate of return (MIRR): 20.72%15.07%18.95%21.67% If Blue Lama Mining Company's managers select projects based on the MIRR eriterion, they should Which of the following statements about the relationship between the IRR and the MIRR is correct? A typical firm's IRR will be equal to its MIRR. A typieal firm's IRR will be less then its MIRR. A typical firm's IRR. will be greater than its MIRR