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1. TI Inc. is considering two 5-year investment projects (A and B). The projects’ cash flows...

1. TI Inc. is considering two 5-year investment projects (A and B). The projects’ cash flows are summarized in the table below. TI’s WACC is 7%.

Pick one project (A or B): What are the IRR and MIRR of this project? Which metric you would recommend using to Truman’s CEO and why? (Explain briefly)

Year

0

1

2

3

4

5

Project A CFs

- $100,000

$1,000

$2,000

$3,000

$3,000

$160,000

Project B CFs

- $100,000

$50,000

$40,000

$30,000

$3,000

$1,000

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