Suppose a firm is considering two mutually exclusive equally risky projects with WACC - 10% and the following cash flows: 0 1 2 3 4 - $1,000 $500 $450 $350 Project x Project Y $200 $150 $1,000 $750 $400 $300 How can you calculate the MIRR for the project that maximizes shareholder value? Assuming that your professional financial calculator is able to calculate the MIRR, use the following table to indicate which values you should enter to compute the MIRR for Project X. CF CF: CF, CF Input Keystroke Arrow down Output CF 500 450 350 200 Arrow down Arrow down Arrow down Arrow down IRR MIRR Suppose that your calculator does not have the ability to compute the MIRR. Here are the steps you need to take to calculate the MIRR for Project Y. CF 1. Use the following table to indicate which values you should enter to compute the net present value (NPV) of all cash inflows, CF CF) CF CE Input Keystroke Arrow down Arrow down Arrow down Arrow down Arrow down I/Y NPV Output 2. Use the following table to indicate which values you should enter to compute the future value of the NPV. Input Keystroke N 1/4 PV PMT FV Output 3. Use the following table to indicate which values you should enter to compute the MERR. Input Keystroke Output N PV PMT FV T/Y Finally, you can answer the question: The MIRR for the project maximizes shareholder value Suppose a firm is considering two mutually exclusive equally risky projects with WACC - 10% and the following cash flows: 0 1 2 3 4 - $1,000 $500 $450 $350 Project x Project Y $200 $150 $1,000 $750 $400 $300 How can you calculate the MIRR for the project that maximizes shareholder value? Assuming that your professional financial calculator is able to calculate the MIRR, use the following table to indicate which values you should enter to compute the MIRR for Project X. CF CF: CF, CF Input Keystroke Arrow down Output CF 500 450 350 200 Arrow down Arrow down Arrow down Arrow down IRR MIRR Suppose that your calculator does not have the ability to compute the MIRR. Here are the steps you need to take to calculate the MIRR for Project Y. CF 1. Use the following table to indicate which values you should enter to compute the net present value (NPV) of all cash inflows, CF CF) CF CE Input Keystroke Arrow down Arrow down Arrow down Arrow down Arrow down I/Y NPV Output 2. Use the following table to indicate which values you should enter to compute the future value of the NPV. Input Keystroke N 1/4 PV PMT FV Output 3. Use the following table to indicate which values you should enter to compute the MERR. Input Keystroke Output N PV PMT FV T/Y Finally, you can answer the question: The MIRR for the project maximizes shareholder value