In this project, you will practice making recommendations based on a data set and your calculations of MIRR and IRR.

Overview

You work for Truist Capital Finance as a Financial Analyst. Your company is considering two mutually exclusive projects, Xylon and Yakum, to help grow their market share. The project costs and cash flows are shown in the table below.

Year	Project Xylon	Project Yakum
0	-$5,000	-$5,000
1	$1,000	$4,500
2	$1,500	$1,500
3	$2,000	$1,000
4	$4,000	$500

Instructions

Both of these projects are equally risky, and their cost of capital is 12%. Calculate and determine which project has the higher modified internal rate of return (MIRR). Based on your information, make your recommendation to the senior advisory staff indicating which project Truist Capital Finance should choose. Your recommendation must be based on the modified internal rate of return (MIRR). Use the following to help guide you.

• Recall what MIRR measures.
• Calculate which project has the higher MIRR.
• Compare MIRR with IRR (internal rate of return).

Be sure to clearly define the problem, show your written analysis of the information, and state your project recommendation.