TI Inc. is considering a 4-year renovation investment project for its existing manufacturing facility. The project cash flows are summarized in the table below:
Management is expecting at least 5% annual return from this investment. What are the IRR and MIRR of the following cash flows. WHich metric you would recommend to Truman CEO and why? (explain briefly)
|
Year
|
0
|
1
|
2
|
3
|
4
|
|
Cash flow
|
-400,000
|
370,000
|
120,000
|
60,000
|
30,000
|