NPV and IRR Butler International Limited is evaluating a project in Erewhon. The project will create the following cash flows: All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 4 percent.
| Year |
Cash Flow |
| 0 |
-950,000 |
| 1 |
285,000 |
| 2 |
345,000 |
| 3 |
415,000 |
| 4 |
255,000 |
If Butler uses a required return of 11 percent on this project . . .
B. What are the NPV and IRR of the project?
C. Is the IRR you calculated the MIRR of the project?
D. Why or why not?