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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
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 $ million at Year to mitigate the environmental problem, but it would not be required to do so Developing the mine without mitigation would require an initial outlay of $ million, and the expected cash inflows would be $ million per year for years. If the firm does invest in mitigation, the annual inflows would be $ million. The riskadjusted WACC is
Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $ should be entered as Do not round intermediate calculations. Round your answers to two decimal places.
NPV: $
million
IRR:
Calculate the NPV and IRR without mitigation. Enter your answer for NPV in millions. For example, an answer of $ should be entered as Do not round intermediate calculations. Round your answers to two decimal places.
NPV: $
million
IRR:
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