The 1PR evaluation method assumes that cash flows from the oroject are reinvested at the same rate ecual to the IRR. Howtver, in realty the rainyested cash flows may not necessamly generate a return equal to the:IRR. Thus, the moditied IRR approach makes a more reasonable assumption other than the project's 1PR. Consider the following situstion: furty button Clothing Company is analyang a project that requires an indial imvestment ed 1500,000 . The project's exoccted cash flows ate: Fuzzy Button. Clothing Company's WACC is 10%, and the project has the same resk as the firm's average project. Caiculate this project's modificd intermal rate of retutn (MIRR): 1949% 22.74% 21.66% 20.58% If Fuzzy Button Clothing Company's managers seloct projects based on the MaRr cnterion, they should this independent project Which of the following statements bect describes the difference between the IRR method and the Mirk method? The IRf method uses the present value of the initual investment to calculate the Ire. The MIRR method uses the ferminal value of the itutial investment to queulate the MIRR. The IRR method uses only cash inflows to calculate the IRR. The MiRR method uses both cesh inflows and cash outhlows to calculate the MERRA The IRR method assumes that cash flows are reinwested at a rate of retirn equal to the IRR. The MrRR method assumes that cash flows. are reinvested at a rate of return equal to the cost of copital