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Modified IRR(MIRR).

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

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

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

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The solution calculates the modified IRR (MIRR) of two mutually exclusive projects whose costs and cash flows are given.

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

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