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Amining company is deciding whether to open a strip mine with an initial outlay at t - 0 of $2 million. Cash inflows of $12.5

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Amining company is deciding whether to open a strip mine with an initial outlay at t - 0 of $2 million. Cash inflows of $12.5 million would occur at the end of Year 1. The land must be retumed to its natural state so there is a cash outflow of $12.5 million, payable at the end of Year 2. a. Select the project's NPV profile. A B C D NPV Millions of Dollars 2. 1.5 NPV Mlions of Dollars 2. 1.5 NPV (Milions of Dollars 25 15 NPV (Milions of Dollars 15 0. 0.5 0.5 0.5 -08 08 0.5 -0.5 100200 . 100 200 300 400 500 WACCA 100200 200 300 ca 300 400 500 WACCA 300 400 300 WACCS 400 500 WA CC/% The correct sketch is -Select- b. Should the project be accepted if WACC - 10% St. V Should the project be accepted if WACC - 20%? -Select- c. What is the project's MIRR at WACC = 10%? Do not round intermediate celculations. Round your answer to two decimal places. What is the project's MIRR at WACC = 20%? Do not round intermediate celculations. Round your answer to two decimal places. % Does MIRR lead to the same accent/raject decision for this project as the NPV method? -Select- Does the MIRR method always lead to the same accept/reject decision as NIV? (Hint: Consider mutually exclusive projects that differ in size.) -Select

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