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    B. If the regular IRR is less than the cost of capital, then the modified IRR will be greater than the regular IRR. That situation applies in this case.
    C. The project should be rejected because the modified IRR is less than the regular IRR.
    D. The project should be accepted because the modified IRR is greater than the cost of capital.
    E. The regular IRR is less than the cost of capital. Under this condition, the modified IRR will also be less than the regular IRR.
    Answer: B
    Explanation:
    Explanation/Reference:
    Explanation:
    PV(Outflows) = -$2,000,000 - $2,000,000/1.12 = -$3,785,714.
    TV(Inflows) = $1,000,000(FVIFA(12%,4))(1.12) + $2,000,000
    = $1,000,000(4.7793)(1.12) + $2,000,000 = $7,352,816.
    1 + MIRR = [7,352,816/3,785,714]

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    1/6; MIRR = 11.7%.
    Since the MIRR is less than the cost of capital, the IRR is less than the MIRR.

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    A. CPI-based inflation rate.
    B. The non-accelerating inflation rate of unemployment.
    C. The actual unemployment rate.
    Answer: B
    Explanation:
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    Explanation:


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