Question: a). You have been assigned the task of evaluating two mutually exclusive projects with the following cash flows: Year Project A Cash Flows Project B

a). You have been assigned the task of evaluating two mutually exclusive projects with the following cash flows:

Year

Project A Cash Flows

Project B Cash Flows

$ (15,000)

11,000

11,500

(12,000)

14,000

$ (15,000)

14,500

(11,500)

11,000

10,500

Requirements:

The projects are equally risky, and their Cost of Capital is 12%. You must make a recommendation, and you must base it on the Modified IRR. What is the MIRR of the better project?

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