The correct answer is A. PV of hurdle rate.
The modified internal rate of return (MIRR) is a technique used to calculate the internal rate of return (IRR) of an investment project that takes into account the time value of money. The MIRR is calculated by finding the discount rate that makes the present value of the cash inflows equal to the present value of the cash outflows.
The hurdle rate is the minimum acceptable rate of return for an investment project. The hurdle rate is usually set by the company’s management and is based on the company’s cost of capital.
The PV of hurdle rate is the present value of the cash flows that are discounted at the hurdle rate. The PV of hurdle rate is equal to the sum of the present values of the cash inflows and the present value of the cash outflows.
The FV of hurdle rate is the future value of the cash flows that are compounded at the hurdle rate. The FV of hurdle rate is equal to the sum of the future values of the cash inflows and the future value of the cash outflows.
Therefore, the modified internal rate of return is considered as present value of costs and is equal to the PV of hurdle rate.