Question
Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below. The projects are equally risky, and
Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below. The projects are equally risky, and their cost of capital is 11%. You must make a recommendation, and you must base it on the modified IRR (MIRR). Calculate the two projects' MIRRs. Round your answers to two decimal places.
| 0 | -$5,000 | -$5,000 | ||
| 1 | 1000 | 4,500 | ||
| 2 | 1500 | 1500 | ||
| 3 | 2000 | 1000 | ||
| 4 | 4000 | 500 |
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Authors: Greg Middleton
1st Edition
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