An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $37 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $217 million, and the expected cash inflows would be $67 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $87 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk-adjusted WACC is 10%. a) Calculate the IRR without mitigation. b) Calculate the IRR with mitigation. a) 10.00%; b) 28.77% a) 28.77%; b) 21.10% a) 21.10%; b) 16.47% a) 10.00%; b) 10.00%