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Below Are the Returns of Nulook Cosmetics and the "Market

Question 67

Multiple Choice

Below are the returns of Nulook Cosmetics and the "market" over a three-year period:  Year  Nulook  Marke18%6%29%9%332%22%\begin{array} { l c r } \underline{\text { Year } }& \underline{\text { Nulook }} &\underline{ \text { Marke} } \\1 & 8 \% & 6 \% \\2 &9\% & 9 \% \\3 &32 \%&22\%\end{array}  Year  Nulook  Market 18%6%29%9%\begin{array}{lll}\underline{\text { Year }} &\underline{\text { Nulook }}& \underline{\text { Market }}\\1&8\%&6\%\\2&9 \% & 9 \%\end{array}
Nulook finances internally using only retained earnings, and it uses the Capital Asset Pricing Model with a historical beta to determine its required rate of return.Currently, the risk-free rate is 7 percent, and the estimated market risk premium is 6 percent.Nulook is evaluating a project which has a cost today of $2,028 and will provide estimated cash inflows of $1,000 at the end of the next 3 years.What is this project's MIRR?


A) 12.4%
B) 16.0%
C) 17.5%
D) 20.0%
E) 22.9%

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