Share
Explore BrainMass

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.............(1,000)......(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?

Solution Preview

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

Solution Summary

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

$2.19