1. Modified internal rate of return (MIRR): Morningside Bakeries recently purchased equipment at a cost of $650,000. Management expects the equipment to generate cash flows of $275,000 in each of the next four years. The cost of capital is 14 percent. What is the MIRR for this project?
2. Discounted payback: Nugent Communication Corp. is investing $9,365,000 in new technologies. The company's management expects significant benefits in the first three years after installation (as can be seen by the following cash flows), and smaller constant benefits in each of the next four years. What is the discounted payback period for the project assuming a discount rate of 10 percent?