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    NEW QUESTION: 1
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    A. The project should be accepted because the modified IRR is greater than the cost of capital.
    B. Given the data in the problem, the modified IRR criterion indicates that the project should be accepted.
    However, the NPV is negative. This demonstrates that the modified IRR criterion is not always a valid decision method for projects such as this one.
    C. The regular IRR is less than the cost of capital. Under this condition, the modified IRR will also be less than the regular IRR.
    D. The project should be rejected because the modified IRR is less than the regular IRR.
    E. 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.
    Answer: E
    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. The non-accelerating inflation rate of unemployment.
    B. CPI-based inflation rate.
    C. The actual unemployment rate.
    Answer: A
    Explanation:
    The NAIRU determines when an economy will experience bottlenecks in the labor market.

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