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

Year

X

Y

0 year

$2,000 project x

$2,000 project y

1 year

200 project x

2,000 project y

2 year

600 project x

200 project y

3 year

800 project x

100 project y

4 year

1,400 project x

75 project y

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%