1.A proposed nuclear power plant will cost $1.6 billion to build and then will produce cash flows of $240 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $840 million. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in billions rounded to 3 decimal places.)

a. What is the NPV of the project if the discount rate is 4%?

b. What is the NPV of the project if the discount rate is 18%?

2.Strip Mining Inc. can develop a new mine at an initial cost of $17 million. The mine will provide a cash flow of $44 million in 1 year. The land then must be reclaimed at a cost of $28 million in the second year.

a. What are the IRRs of this project? (Enter your answers in ascending order. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

IRR 1	%
IRR 2	%

b. Should the firm develop the mine if the discount rate is 8%? 18%? 30%? 70%? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions rounded to 3 decimal places.)

Discount Rate	NPV	Develop
8%
18%
30%
70%