PART A:

Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below:

Year	X	Y
0	$2,000	$2,000
1	200	2,000
2	600	200
3	800	100
4	1,400	75

The projects are equally risky, and the firm's required rate of return is 12 percent. You must make a recommendation, and you must base it on the modified IRR. What is the MIRR of the better project? Choose the correct choice.

a.

12.89%

b.

13.59%

c.

12.00%

d.

11.46%

e.

15.73%