Calculating IRR The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, This is a golden opportunity. The mine will cost $2,900,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $525,000 at the end of the first year, and the cash inflow is projected to grow at 6% per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $575,000 at the end of Year 11.

1. What is the IRR for the gold mine?
2. The company requires a return of 13% on such projects. Should the mine be opened?