Reference no: EM131526878

Grady Enterprises is looking at two project opportunities for a parcel of land the company currently owns. The first project is a restaurant, and the second project is a sports facility. The projected cash flow of the restaurant is an initial cost of $1 comma 430 comma 0001,430,000 with cash flows over the next six years of $160 comma 000160,000 ?(year one), $280 comma 000280,000 (year two), $ 270 comma 000$270,000 (years three through five), and $1 comma 730 comma 0001,730,000 (year six), at which point Grady plans to sell the restaurant. The sports facility has the following cash flows: initial cost of $2 comma 330 comma 0002,330,000 with cash flows over the next four years of $400 comma 000400,000 (years one through three) and $3 comma 290 comma 0003,290,000 (year four), at which point Grady plans to sell the facility. The appropriate discount rate for the restaurant is 10.510.5 % and the appropriate discount rate for the sports facility is 12.012.0?%. What are the MIRRs for the Grady Enterprises projects? What are the MIRRs when you adjust for the unequal lives. Do the MIRR adjusted for unequal lives change the decision based on the MIRRs? Hint: Take all cash flows to the same ending period as the longest project.