Question
Your company is considering two mutually exclusive projects X and Y whose costs and cash flows are shown below: Project X Project Y Year Cash
- Your company is considering two mutually exclusive projects X and Y whose costs and cash flows are shown below:
|
| Project X | Project Y |
| Year | Cash Flows | Cash Flows |
| 0 | ($2,000) | ($2,000) |
| 1 | 200 | 2,000 |
| 2 | 600 | 200 |
| 3 | 800 | 100 |
| 4 | 1,400 | 75 |
Each project is equally risky, and the companys Cost of Capital is 12%. You must make a recommendation based on the MIRR. What is the MIRR of the best project?
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Project Finance In Theory And Practice
Authors: Stefano Gatti
3rd Edition
0128114010, 978-0128114018
