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FINANCIAL MANAGEMENT 1 answer below » The Caffeine Coffee Company uses the modified internal rate of return. The firm has a cost of capital of 12 percent. The project being analyzed is as follows
($27,000 investment): Year 1 ……………….. 2 ……………….. 3 ……………….. Cash Flow $15,000 12,000 9,000 a.What is the modified internal rate of return? An approximation from Appendix B is adequate for the final answer. (You do not need to interpolate.) www.mhhe.com/bhd14 b.Assume the traditional internal rate of return on the investment is 17.5 percent. Explain why your answer View complete question » The Caffeine Coffee Company uses the modified internal rate of return. The firm has a cost of capital of 12 percent. The project being analyzed is as follows
($27,000 investment): Year 1 ……………….. 2 ……………….. 3 ……………….. Cash Flow $15,000 12,000 9,000 a.What is the modified internal rate of return? An approximation from Appendix B is adequate for the final answer. (You do not need to interpolate.) www.mhhe.com/bhd14 b.Assume the traditional internal rate of return on the investment is 17.5 percent. Explain why your answer in part a would be lower. View less » Jan 11 2014 09:17 AM
