Which project has the higher mirr


Problem: Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below:

Year         X              Y
0        -$ 5,000    - $5,000
1            1,000        4,500
2            1,500        1,500
3            2,000        1,000
4            4,000           500

The projects are equally risky, and their cost of capital is 12%. You must make a recommendation, and you must base it on the modified IRR (MIRR). Which project has the higher MIRR?"

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Finance Basics: Which project has the higher mirr
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