Big Inc is considering Two Projects X and Y, whose cash flows are shown below These projects are mutually exclusive, equally risky, and not repeatable The CEO believes the IRR is the best selection criterion, while the CFO advocates other methods WACC 8 00 Year 0 1 2 3 4 CF x $1,100 $450 $500 $100 $100 CF y $2,750 $625 $725 $800 $1,400 What are the MIRRs Discuss the importance of the MIRR method over IRR If these projects are mutually exclusive which should be selected and why If they are in depended which project(s) should be selected and why Discuss your results of the methods used above and make a recommendation on the projects to the CEO using the different methods

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Question: Big Inc. is considering Two Projects X and Y, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable.

Big Inc. is considering Two Projects X and Y, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates other methods.

WACC:	8.00%
Year	0	1	2	3	4
CF_x	$1,100	$450	$500	$100	$100
CF_y	$2,750	$625	$725	$800	$1,400

What are the MIRRs? Discuss the importance of the MIRR method over IRR.

If these projects are mutually exclusive which should be selected and why? If they are in depended which project(s) should be selected and why?

Discuss your results of the methods used above and make a recommendation on the projects to the CEO using the different methods?

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