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

Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below: 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? a. 11.70% b. 13.10% c. 12.50% d. 12.00% e. 11.50%

Year Project X Project Y

0 (2000) (2000)

1 200 2000

2 600 200

3 800 100

4. 1400 100

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