Fuzzy button clothing company is analyzing a project that requires an investment of $3,225,000. the project’s expected cash flows are:

year

cash flow

year 1

$300,000

year 2

-200,000

year 3

$450,000

year 4

$500,000

fuzzy button clothing company’s wacc is 8%, and the project has the same risk as the firm’s average project. calculate this project’s modified internal rate of return (mirr).

a. 13.78%

b. -20.40

c.16.08%

d. 18.37%

2. if fuzzy button clothing company’s managers select projects based on the mirr criterion, they this independent project.

a. accept

b. reject

3. which of the following statements about the relationship between irr and the mirr is correct?

a. a typical firm’s irr will be greater than it’s mirr

b. a typical firm’s irr will be less than it’s mirr

c. a typical firm’s irr will be equal to it’s mirr

Consider the scenario below and let us know if you believe lauren smith's actions to be ethical. let us know why or why not. lauren smith is the controller for sports central, a chain of sporting goods stores. she has been asked to recommend a site for a new store. lauren has an uncle who owns a shopping plaza in the area of town where the new store is to be located, so she decides to contact her uncle about leasing space in his plaza. lauren also contacted several other shopping plazas and malls, but her uncle’s store turned out to be the most economical place to lease. therefore, lauren recommended locating the new store in her uncle’s shopping plaza. in making her recommendation to management, she did not disclose that her uncle owns the shopping plaza. if management decided to go with lauren's uncle's plaza, what additional information would be needed in the financial statements?