Dry-Sand Company Is Considering Investing in a New Project

Multiple Choice

Dry-Sand Company is considering investing in a new project.The project will need an initial investment of $1,200,000 and will generate $600,000 (after-tax) cash flows for three years.However,at the end of the fourth year,the project will generate -$500,000 of after-tax cash flow due to dismantling costs.Calculate the MIRR (modified internal rate of return) for the project if the cost of capital is 15%.

A) 8.1%
B) 12.6%
C) 28.2%