Discounting MIRR or the compounding MIRR

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Reference no: EM131328785

Assume that the Boilermaker Investment Company takes on a project that will have them heating ten buildings at Purdue University for a period of 3 years. The project costs 3 million dollars up front, then B.I.C. will receive 2.2 million dollars for 3 years, then in the fourth year B.I.C. will have dismantling costs of 3 million dollars. If the cost of capital is 8%, which MIRR is higher, the discounting MIRR or the compounding MIRR?

The discounting MIRR is higher by 0.34%

The discounting MIRR is higher by 0.92%

The compounding MIRR is higher by 0.12%

The compounding MIRR is higher by 0.37%

Reference no: EM131328785

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