60.00 A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $933 milion at Year to mitigate the environmental problem, but it would not be required to do so. Developing the mine (without mitigation) would moure an initial outlay of $54 million, and the expected cash inflows would be $18 million per year for 5 years. If the fiem does invest in mitigation, the annual indows would be $19 mon. The risk adjusted WACC 114 Calculate the NPV and TRR with mitigation. Enter your answer for NPV in millons. For example, an answer of $10,550,000 should be entered at 10:55. Do not round Intermediate calculations. Hound your answers to two decimal places NPV: million TRIL: Calculate the NPV and IRR without mitigation Enter your answer for NPV in millions. For example, an answer of 510,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to the decimal places NPV million TRR How should the environmental effects be dealt with when this project is evaluated? 1. The environmental effects if not mitigated could result in additional loss of cash flows and/or fines and penalties due to ill will among customers, community, etc Therefore, even though the mine is legal without mitigation, the company needs to make sure that they have anticipated all costs in the "no mitigation analysis from not doing the environmental mitigation II The environmental effects should be ignored since the mine is legal without mitigation II. The environmental effects should be treated as a sun cost and therefore ignored. IV. The environmental effects ir net mitigated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits to performing ano mitigation analysis v The environmental elfects should be treated as a remote possibility and should only be considered at the time in which they actually occur Should this project be undertaken If should the fim do the mitigation 1. Under the assumption that costs have been considered, the company would not mitigate for the environmental impact of the project since its TRR without mitigation is greater than its HR when mitigation costs are included in the analysis b. How should the environmental effects be dealt with when this project is evaluated? 1. The environmental effects if not mitigated could result in additional loss of cash flows and/or fines and penalties due to ill will among customers, community, etc. Therefore, even though the mine is legal without mitigation, the company needs to make sure that they have anticipated all costs in the "no mitigation analysis from not doing the environmental mitigation 11. The environmental effects should be ignored since the mine is legal without mitigation TIL. The environmental effects should be treated as a sunk cost and therefore ignored IV. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits to performing ano mitigation analysis V. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur c. Should this project be undertaken? Its should the fim do the mitigation Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its IRR without mitigation is greater than its TRA when mitigation costs are included in the analysis 11. Under the assumption that all costs have been considered the company would mitigate for the environmental impact of the project since its NPV with mitigation is greater than its NPV when mitigation costs are not included in the analysis IIUnder the assumption that all costs have been considered the company would not mitigate for the environmental impact of the project since its NPV without mitigation is greater than its NPV when mitigation costs are included in the analysis IV. Under the assumption that all costs have been considered, the company would mitigate for the environmental impact of the project since its IRR with mitigation is greater than it when mitigation costs are not included in the analysis V. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its NPV with mitigation is greater than its NPV when mitigation costs are not included in the analysis S