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Capital budgeting criteria: ethical considerations A mining company is considering a new project. Because the mine has received a permit, the project would be legal;
Capital budgeting criteria: ethical considerations A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $9 million at Year 0 to mitigate the environmental Problem, but it would not be required to do so. Developing the mine (without mitigation) would cost $51 million, and the expected net cash inflows would be $17 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $18 million. The risk adjusted WACC is 13%. a. Calculate the NPV and IRR with tion. Round your answers to two decimal places Enter your answer for NPV in millions For example, an answer of $10,550,000 should be entered as 10.55. NPV million IRR. Round your answers to two decimal places. Enter your answer for NPV in millions. For example, an answer of $10,550,000 Calculate the NPV and IRR without mitigation should be entered as 10.55. NPV million IRR
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