1

2.

Does the movie have positive NPV if the cost of capital is 10.8%?

If the cost of capital is 10.8% the NPV is _____ million. ( round to two decimal places)

You own a coal mining company and are considering opening a new mine. The mine will cost $116.3 million to open. If this money is spent immediately, the mine wll generate $19.4 million for the next 10 years. After that, the coal will run out and the site must be cleaned and maintained at environmental standards. The cleaning and maintenance are expected to cost $1.6 million per year in perpetuity. What does the IRR rule say about whether you should accept this opportunity? If the cost of capital is 8.5%, what does the NPV rule say