Reference no: EM132003758

As the director of Big Sky Corp, you are evaluating two mutually exclusive projects with the following net cash flow:

Year     Cash Flow X ($)            Cash Flow Y ($)

0          -100,000                       -100,000

1          60,000                          20,000

2          30,000                          20,000

3          30,000                          40,000

4          10,000                          60,000

5          10,000                          -5,000

It was later discovered that the last cash flow for project Y, in year 5 was -$5,000, because of clean-up and disposal cost associated with project Y. The new cash flow schedule for Project Y is as given above. Calculate the MIRR of the project? Assume that the discount rate is 10% and the reinvestment rate is 11%.

11.28%

7.17%

10.98%

9.85%