Question

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

The projects are equally risky, and their WACC is 13%. What is the MIRR of the project that maximizes shareholder value? Do not round intermediate calculations. Round your answer to two decimal places. %

Answer 1

YEAR Nm to cash flows Project x Project Y -$1,000 -$1,000 $90 $1,100 $320 $90 $430 $55 $650 $45 13.75% 15.98% MIRR(B3:37,13%,13%) MIRR(C3:C7,13%,13%) 2 discounted cash flows Project X Project Y -$1,000.00 -$1,000.00 $79.65 $973.45 $250.61 $70.48 $298.01 $38.12 $398.66 $27.60 $26.92 $109.65 pv @ 13% 1.0000 0.8850 0.7831 0.6931 0.6133 NPV 3 MIRR 12 MIRR of the project that maximises shareholder value = 15.98% 14