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Problem:

A firm is considering two mutually exclusive projects, X and Y, with the following cash flows:

Year 0 1 2 3 4

Project X -$1,000 $100 $280 $370 $700

Project Y -$1,000 $1,100 $110 $50 $55

The projects are equally risky, and their WACC is 8.0%. What is the MIRR of the project that maximizes shareholder value? Show your all work and describe in detail.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91145987

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