There are 11 select bars shown above, the choices for each are in order as follows: 1. Dollar; Percentage 2. WACC; NPV; MIRR 3. Breakeven; Liquidity; Risk, Profitability 4. Always; Never 5. WACC; NPV; Cost 6. Dependent; Independent 7. Dependent; Independent 8. Cannot; Can 9. IRR; NPV; MIRR 10. Neither; Project A; Project B; Both projects A and B 11. Neither; Project A; Project B; Both projects A and B

3. Capital Budgeting Decision criteria: MIRR Capital Budgeting Decision Criteria: MIRR MIRR Business executives often prefer to work with -Select- rates of return, so to overcome some of the IRR's limitations the modified IRR was devised. The MIRR equation is: (1+r) MTRR PV costs MIRR While the IRR's reinvestment rate assumption is the IRR, the M RR reinvestment rate assumption is the project's Select- :0. As a result, the MIRR is generally a better indicator of a project's true -Select- than IRR. Unlike the IRR, there can -Select- be more than one MIRR, and the MIRR can be compared with the project's -Select-awhen deciding to accept or reject projects. For -select- a projects, the NP, IRR, and MIRR always reach the same accept/reject conclusion; so the three criteria are equally good when evaluating -Select- a projects. If projects are mutually exclusive and they differ in size, conflicts in project acceptance -select-a arise. In these cases, the Select-ais the best decision method because it selects the project that maximizes firm value. Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 11%, 420 Project A 900 Project B -900 What is Project A's MIRR? Round your answer to two decimal places. Do not round your intermediate calculations. What is Project B's MIRR? Round your answer to two decimal places. Do not round your intermediate calculations. If the projects were independent, which project(s) would be accepted according to the MIRR method? Select If the projects were mutually exclusive, which project(s) would be accepted according to the MIRR method? Select