Mass Company Is Investing in a Giant Crane

Multiple Choice

Mass Company is investing in a giant crane. It is expected to cost $6 million in initial investment, and it is expected to generate an end-of-year cash flow of $3 million each year for three years. At the end of the fourth year, there will be a $1 million disposal cost. Calculate the MIRR for the project if the cost of capital is 12 percent.

A) 17.8 percent
B) 15.3 percent
C) 23.8 percent
D) 22.1 percent