Question: Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $500,000. The projects expected cash flows are: Year Cash Flow Year 1

Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $500,000. The projects expected cash flows are: Year Cash Flow Year 1 $275,000 Year 2 200,000 Year 3 450,000 Year 4 450,000 Celestial Crane Cosmeticss WACC is 10%, and the project has the same risk as the firms average project. Calculate this projects modified internal rate of return (MIRR): If Celestial Crane Cosmeticss managers select projects based on the MIRR criterion, they should this independent project. Which of the following statements best describes the difference between the IRR method and the MIRR method?

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