Mooradian Corporation estimates that its weighted average cost of capital is 8.8 percent. The company is considering two mutually exclusive projects whose after-tax cash flows are as follows: Year 0 Project S CF Project L CF 1 23 ($3,894) $3,518 $4,039 $3,310 $1,115 ($3,583) $4,015 $1,956 $1,027 $1,088 What is the modified internal rate of return (MIRR) of the project with the highest NPV? 4 Should this project be accepted? ○ 33.77%; no 30.77%; yes 33.77%; yes O 37.77%; no ○ 37.77%; yes
Mooradian Corporation estimates that its weighted average cost of capital is 8.8 percent. The company is considering two mutually exclusive projects whose after-tax cash flows are as follows: Year 0 Project S CF Project L CF 1 23 ($3,894) $3,518 $4,039 $3,310 $1,115 ($3,583) $4,015 $1,956 $1,027 $1,088 What is the modified internal rate of return (MIRR) of the project with the highest NPV? 4 Should this project be accepted? ○ 33.77%; no 30.77%; yes 33.77%; yes O 37.77%; no ○ 37.77%; yes
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Mooradian Corporation estimates that its weighted average cost of capital is 8.8 percent.
The company is considering two mutually exclusive projects whose after-tax cash flows
are as follows:
Year
0
Project S CF
Project L CF
1
23
($3,894)
$3,518
$4,039
$3,310
$1,115
($3,583)
$4,015
$1,956
$1,027
$1,088
What is the modified internal rate of return (MIRR) of the project with the highest NPV?
4
Should this project be accepted?
○ 33.77%; no
30.77%; yes
33.77%; yes
O 37.77%; no
○ 37.77%; yes
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