Anderson International Limited is evaluating a project in Erewhon The project will create the following cash flows Year Cash Flow 0 862000 1 303800 2 219700 3 320000 4 288700 All cash flows will occur in Erewhon and are expressed in dollars In an attempt to improve its economy, the Erewhonian gover...

Input area Annual cash flows Year 0 690000 Year 1 ...

Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows:

Question:

Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows:

Year	Cash Flow
0	-862000
1	303800
2	219700
3	320000
4	288700

All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 4 percent. If Anderson uses a required return of 10 percent on this project, what are the NPV and IRR of the project? Is the IRR you calculated the MIRR of the project? Why or why not?