Question

Fuzzy Button Clothing Company's WACC is 10%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR):

a.14.02%
b.20.88%
c.30.02%
d.28.71%

Answer 1

The MIRR cannot be calculated without the necessary information.

Step-by-step explanation:

The modified internal rate of return (MIRR) is used to calculate the profitability of an investment by considering both the cost of capital and the reinvestment rate of cash flows. To calculate the MIRR, we need the cash inflows and outflows, the cost of capital, and the reinvestment rate.

In this case, the cost of capital (WACC) is given as 10%. However, we don't have the cash inflows and outflows or the reinvestment rate, so we can't calculate the MIRR.