Question: A firm is considering two mutually exclusive projects, X and Y, with the following cash flow: Project X: Project Y: Year CF Year CF 0

A firm is considering two mutually exclusive projects, X and Y, with the following cash flow:

Project X: Project Y:

Year CF Year CF

0 -$1,000 0 -$1000

1 $90 1 $1,100

2 $320 2 $110

3 $370 3 $45

4 $650 4 $45

The project are equally risky, and their WACC is 8%. What is the MIRR of the project that maximizes shareholder value?

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