Question
The Modified Internal Rate of Return of Project B is 11.32%. If Projects A and B are independent, considering only the MIRR method, which project(s)
The Modified Internal Rate of Return of Project B is 11.32%. If Projects A and B are independent, considering only the MIRR method, which project(s) should Big Company proceed with?
Group of answer choices
a. Project "A" should be chosen because Project "A" has a MIRR greater than the MIRR of Project "B", which means that Project "A" has a higher return.
b. Project "B" should be chosen because Project "B" has a MIRR less than the MIRR of Project "A", which means that Project "B" is a more efficient use of capital.
c. Both Projects should be chosen because both Projects have a MIRR > WACC, which means that both Projects have acceptable returns.
d. Neither Project should be chosen because both Projects have a MIRR > WACC which means that both Project's costs exceed their investment given the cost of capital.
e. None of the answers above are correct.
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