Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below:
Year X Y
0 -$5,000 -$5,000
1 1000 4,500
2 1500 1500
3 2000 1000
4 4000 500
The projects are equally risky, and their cost of capital is 13%. You must make a recommendation, and you must base it on the modified IRR (MIRR).
Calculate the two projects' MIRRs. Round your answers to two decimal places.
Project X %
Project Y %
Which project has the higher MIRR?