As the director of Big Sky Corp, you are evaluating two mutually exclusive projects with the following net cash flow:
Year Cash Flow X ($) Cash Flow Y ($)
0 -100,000 -100,000
1 60,000 20,000
2 30,000 20,000
3 30,000 40,000
4 10,000 60,000
5 10,000 -5,000
It was later discovered that the last cash flow for project Y, in year 5 was -$5,000, because of clean-up and disposal cost associated with project Y. The new cash flow schedule for Project Y is as given above. Calculate the MIRR of the project? Assume that the discount rate is 10% and the reinvestment rate is 11%.
11.28%
7.17%
10.98%
9.85%