Modified IRR (MIRR)

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

Year X Y
0 (1,0000) (1,000)
1 100 1,000
2 300 100
3 400 50
4 700 50

The projecs are equally risky,and their cost of capital is 12% you must make a recommendation, and you must base it on the modified IRR (MIRR). What is the MIRR of the better project?

Solution Summary

Uses modified IRR (MIRR) to select between two mutually exclusive projects.