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The Caffeine Coffee Company uses the modified internal rate of return. The firm has a cost of capital of 8 percent. The project being analyzed is as follows ($40,000 investment): Use Appendix A and Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.
Year Cash Flow
1 $ 20,000
2 15,000
3 8,000
a. What is the modified internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Internal rate of return %
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