1.

Your company is considering two mutually exclusive projects, X and Y whose costs and cash flows are shown below. Assume that the projects are equally risky, and their cost of capital is 12%.

Year	Project X	Project Y
0	$(5,500)	$(5,500)
1	1,000	4,500
2	1,500	1,500
3	2,000	1,000
4	4,500	800

What are MIRRs of Project X and Project Y? Which project you will accept based on MIRR project selection criterion, if projects are mutually exclusive?

options:

	MIRRx = 16.46%; MIRRy = 16.02%; accept Project X
	MIRRx = 16.46%; MIRRy = 16.02%; accept Project X
	MIRRx = 16.20%; MIRRy = 16.48%; accept Project X
	MIRRx=17.49%; MIRRy=18.39%; accept Project Y