A mining company is deciding whether to open a strip mine, which costs $2.5 milion Cash Inflows of $14 million would occur at the end of year 1. The land must be returned to its natural state at a cost of $11.5 million, payable at the end of Year 2 a. Plot the project's NPV prelle B NY ME WAA wo IME 25 13 13 05 05 200 WACCIN 200 300 400 WACEN 200 300 400 WACC) ted D 100 200 100 400 WACON The correct such 1. Should the project bete WACC - 107 Should the project be accepted if WACC 205 Think of some other capital budgeting stuations in which negative cash flows during or at the end of the project's life might lead to multiple IRRs. The input in the box below will not be graded, but may be reviewed and considered by your instructor d. What is the project's MIRR at WACC - 10%? Round your answer to two decimal places. Do not round your intermediate calculations What is the project's MIRRO WACC - 2017 Round your answer to two decimal places. Do not round your intermediate calculations Does MIRR lead to the same accept/reject decision for this project as the NPV method? Does the MIRR method always lead to the same accept/reject decision as NPV? (Hint: Consider mutually exclusive projects that differ in stre) Select A mining company is deciding whether to open a strip mine, which costs $2.5 million. Cash inflows of $14 million would occur at the end of Year 1. The land must be retumed to its natural state at a cost of $11.5 million, payable at the end of Yent 2. a. Plot the project's NPV profile A C M NOV CM 25 18 08 05 0 900 200 200 WACC) 200 300 400 WACC) 100 200 300 400 WACCIS) D M DONDO Foto- 100 200 400 WACC) The correct skatch is lact b. Should the project be accepted if WACC - 10% -Select Should the project be accepted ir WACC 20% Select Budgeting 100 400 WACC%) The correct sketch is -Select- b. Should the project be accepted If WACC - 10%? Should the project be accepted If WACC - 20%? -Select- -Select- c. Think of some other capital budgeting situations in which negative cash flows during or at the end of the project's life might lead to multiple IRRs. The input in the box below will not be graded, but may be reviewed and considered by your instructor. d. What is the project's MIRR at WACC - 10%? Round your answer to two decimal places. Do not round your intermediate calculations What is the project's MIRR WACC -20% Round your answer to two decimal places. Do not round your intermediate calculations DOS MIRA lead to the same accept/reject decision for this project as the NPU method? Does the MIHR method always lead to the same accept/reject dechion as NPV? (Mint Consider mutually exclusive projects that differ in size) Select
