Year Cash Flow

0 -$1,000

1 400

2 300

3 500

4 400

The company’s WACC is 10%. What are the project’s payback, internal rate of return, and net present value?

Your company is considering two mutually exclusive projects, Alpha and Beta, whose costs and cash flows are shown below:

Year Alpha Beta

0 -2,000 -2,000

1 200 1,000

3 600 200

4 800 100

5 1,400 100

Both projects are equally risky, and their cost of capital is 14%. You must make a recommendation, and it has to be based on MIRR. What is the MIRR of the better of the two projects?