electric utility is considering a new power plant in northern Arizona. Power from the permit, the plant would be legal; but it would required to do so. The plant without mitigation would cost $210.08 million, and the annual inflows would be $75.59 million. Unemployment in the area where the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received expected cash infows would be $70 million per year for 5 years. If the firm does invest in mitiation, the cause some air pollution. The company could spend an additional $40 miltion at Year O to mitigate the environmental probiem, but it would not be plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 19% your answers to two decimal places. Enter your answer for NPV in milions. Do not round your intermediate calculations. For example, an answer of $10,550,00 should be entered as 10.55. Negative value should be indikcated by a minus sign. NPV $ IRR minion for NPV in millions. Do not round your intermediate calculations. For Calculate the NPV and IRR without mitigation, Round your arswers to two decimal places. Enter your answer example, an answer of $10,s50,000 should be entered as 10.55. IRR b. How should the environmental effects be dealt with when evaluating this project? t. The environmental effects should be trested as a remote possibility and should only be considered at the time in which they actuelly occur l. The envirenmental effects if not mitigated woutd result in additional cash nows. Therefore, since the plant is legal without mitigation, t there are no benefits to performing a "no mitigation analyss III. The environmental effects shouid be ignored since the plant is legal without mitigation. IV. The environmental effects shouid be treated as a sunk cost and therefore ignored . If the utlity mitigstes for the environmental effects, the is not acceptable. However, before the company chooses to do the preject without mitipation, it needs to make sure that any costs of "ill will for not mitigeting for Ine environmental effects have been considered in the original analysis c Should this project be undertaken? I. The project should be undertaken only it they do not mitigate for the environmental effects. However, they want to make sure thet they've done the analysis properly due to any-a wn-ard additional "costs-that might fest mom undertaking the project without concern for the environmental impacts. 11. The preject should be undertaken cely under the "mitigation" assumotion. IIL. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions. IV. The project should be undertaken since the NPV is positive under both the "mitigation and "no mitigation assumptions. V. Even when no mitigation is considered the project has a negative NPv, so it should not be undertaken