Drinkable Water Systems Is Analyzing a Project with Projected Cash

Multiple Choice

Drinkable Water Systems is analyzing a project with projected cash inflows of $127,400, $209,300, and -$46,000 for Years 1 to 3, respectively. The project costs $251,000 and has been assigned a discount rate of 12.5 percent. Should this project be accepted based on the discounting approach to the modified internal rate of return? Why or why not?

A) Yes; The MIRR is 11.85 percent.
B) No; The MIRR is 11.33 percent.
C) Yes; The MIRR is 11.33 percent.
D) No; The MIRR is 11.68 percent.
E) No; The MIRR is 11.85 percent.