Question
Bullock Gold Mining is evaluating a new gold mine in South Dakota. Estimated project cash flows are provided in the table shown below and the
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Bullock Gold Mining is evaluating a new gold mine in South Dakota. Estimated project cash flows are provided in the table shown below and the required rate of return for this project is 12%.
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Compute the Modified Internal Rate of Return (MIRR).
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Should the company open this mine?
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| Year | Cash Flow ($-millions) |
| 0 | (650) |
| 1 | 80 |
| 2 | 121 |
| 3 | 162 |
| 4 | 221 |
| 5 | 210 |
| 6 | 154 |
| 7 | 108 |
| 8 | 86 |
| 9 | (72) |
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
