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Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below: Year 0 1 2 3 4

Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below: Year 0 1 2 3 4 X ($1000) 100 300 400 700 Y ($1000) 1000 100 50 50 The projects are equally risky, and their cost of capital is 12 percent. Based on the modified internal rate of return, which one project is better?

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