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QUESTION 3 Wira Mining Ltd is considering a new project. Because the mine has received a permit, the project, the project will be legal, but it would cause significant harm to a nearby river. The firm could spend an additional $10,000,000 at Year 0 to mitigate the environmental problem, but it would not be required to do so. Developing the mine (without mitigation) would cost $60,000,000 and the expected cash inflows would be $20,000,000 per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $21,000,000 per year. The WACC is 12%. Required: a) Construct a model to calculate the net present value (NPV) for with mitigation and without mitigation. You as the finance manager for Wira Mining Ltd, determine which project should be accepted if they are mutually exclusive. (8 marks) b) Construct a model to calculate the internal rate of return (IRR). You as the finance manager for Wira Mining Ltd, determine which project should be accepted if they are mutually exclusive. (7 marks) c) Construct a model to find the payback period for both projects, according to the payback period criterion which project should be accepted. (5 marks) d) Assess how should the environmental effects be dealt with when this project is evaluated. (5 marks) (Total: 25 marks)