Question: Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $450,000. The project's expected cash flows are: Year Cash Flow Year 1

Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $450,000. The project's expected cash flows are: Year Cash Flow Year 1 Year 2 Year 3 Year 4 $350,000 -175,000 450,000 475,000 Celestial Crane Cosmetics's WACC is 7%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR): 26.59% 20.81% 23.12% 21.96% If Celestial Crane Cosmetics's managers select projects based on the MIRR criterion, they should Which of the following statements best describes the difference between the IRR method and the O The IRR method uses the present value of the initial investment to calculate the IRR. T initial investment to calculate the MIRR. reject accept this independent project. thod? method uses the terminal value of the O The IRR method uses only cash inflows to calculate the IRR. The MIRR method uses both cash inflows and cash outflows to calculate the MIRR. O The IRR method assumes that cash flows are reinvested at a rate of return equal to the IRR. The MIRR method assumes that cash flows are reinvested at a rate of return equal to the cost of capital.

Celestial Crane Cosmetics's WACC is 7%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MtRR): 26.59% 20.81% 23.12% 21.96% If Celestial Crane Cosmetics's managers select projects based on the MLRR criterion, they should this independent project. Which of the following statements best describes the difference between the IRR method and the thod? The IRR method uses the present value of the intial investment to calculate the IRR. TI lethod uses the terminal value of the initial investment to calculate the MIRR. The IRR method uses only cash inflows to calculate the IRR. The MIRR method uses both cash inflows and cash outflows to calculate the MIRR: The IRR method assumes that cash flows are reinvested at a rate of return equal to the IRR. The MIRR methed assumes that cash flows are reinvested at a rate of return equal to the cost of capital

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