The discounting MIRR or the compounding MIRR

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Reference no: EM131071400

Assume that the Boilermaker Investment Company takes on a project that will have them heating ten buildings at Purdue University for a period of 3 years. The project costs 3 million dollars up front, then B.I.C. will receive 2.2 million dollars for 3 years, then in the fourth year B.I.C. will have dismantling costs of 3 million dollars. If the cost of capital is 8%, which MIRR is higher, the discounting MIRR or the compounding MIRR?

Can someone show work for the answer to this?

A. The discounting MIRR is higher by 0.34%

B. The discounting MIRR is higher by 0.92%

C. The compounding MIRR is higher by 0.12%

D. The compounding MIRR is higher by 0.37%

E. There is not enough information to answer this question.

Reference no: EM131071400

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