Zellars,Inc.is considering two mutually exclusive projects,A and B.Project A costs $95,000 and is expected to generate $65,000 in year one and $75,000 in year two.Project B costs $120,000 and is expected to generate $64,000 in year one,$67,000 in year two,$56,000 in year three,and $45,000 in year four.Zellars,Inc.'s required rate of return for these projects is 10%.The modified internal rate of return for Project A is
A) 19.19%.
B) 24.18%.
C) 26.89%.
D) 29.63%.

Question

Quizplus · Accepted Answer

The modified internal rate of return (MIRR) for Project A is calculated by considering the costs and the future value of cash inflows at the required rate of return. The MIRR for Project A is 24.18%.