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?"