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You and your friends are planning to invest in a local. The options are as follows: t Library Coffee shop Drug store Electronics 0 $

You and your friends are planning to invest in a local. The options are as follows:

t Library Coffee shop Drug store Electronics
0 $ (600,000.00) $ (800,000.00) $ (800,000.00) $ (800,000.00)
1 $ 135,000.00 $ 175,000.00 $ 200,000.00 $ 150,000.00

Suppose that all options have an indefinite lifespan. The cash flows of the library, the coffee shop and the electronics store are expected to grow annually 2% on perpetuity. While the drug store cash flows will remain constant. If you decide to sell the electronics store on year 10 for $2,250,000 (plus the cash flow with growth from that period), calculate the modified rate of return (MIRR) if the opportunity cost of capital is 6.5% from now to year 5 and 5.5% onwards.

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