Question

Mooradian Corporation estimates that its required rate of return is 11 percent. The company is considering...

Mooradian Corporation estimates that its required rate of return is 11 percent. The company is considering two mutually exclusive projects whose after-tax cash flows are as follows:

Year

Project S

Project L

0

−$3,000

−$9,000

1

2,500

−1,000

2

1,500

5,000

3

1,500

5,000

4

−500

5,000

What is the modified internal rate of return (MIRR) of the project with the lowest NPV?

a.

11.89%
b.

20.12%
c.

14.26
d.

18.25%
e.

13.66%
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