Question
Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows...
Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below:
| Year | X | Y |
| 0 | -5000 | -5000 |
| 1 | 1000 | 4500 |
| 2 | 1500 | 1500 |
| 3 | 2000 | 1000 |
| 4 | 4000 | 500 |
The projects are equally risky, and their cost of capital is 13%. You must make a recommendation, and you must base it on the modified IRR (MIRR). Calculate the two projects' MIRRs. Do not round intermediate calculations. Round your answers to two decimal places.
Project X:
Project Y:
Which project has the higher MIRR?
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