Question: Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below: Year Project X Project Y 0

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

Year Project X Project Y

0 ($2,000) ($2,000)

1 200 2,000

2 600 200

3 800 100

4 1,400 100

The projects are equally risky, and their cost of capital is 10%. You must make a recommendation, and you must base it on the modified IRR. What is the MIRR of the better project?

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