5. Problem 11.09 (Capital Budgeting Criteria: Ethical Considerations)

where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 19%. sign. Do not round intermediate calculations. Round your answers to two decimal places. NPV: $ million IRR: % sign. Do not round intermediate calculations. Round your answers to two decimal places. NPV: $ million IRR: % b. How should the environmental effects be dealt with when evaluating this project? I. The environmental effects should be ignored since the plant is legal without mitigation. II. The environmental effects should be treated as a sunk cost and therefore ignored. will" for not mitigating for the environmental effects have been considered in the original analysis. IV. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur. -Select- V c. Should this project be undertaken? I. The project should be undertaken only under the "mitigation" assumption. II. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions. III. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions. IV. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken. "costs" that might result from undertaking the project without concern for the environmental impacts