Golden Egg Resources Inc has discovered a new gold deposit in the California mountains and must now decide whether to mine the deposit. The most cost-effective way to do so is to use a method called sulphuric acid extraction. However, the use of this process has certain environmental effects that may breach California environmental regulations and/or result in a need for additional work to restore the vegetation around the site. The company also needs to invest in new mining equipment. The management has asked you to perform a financial analysis to help them decide if it is worthwhile to pursue project. You are provided the following financial parameters: Expected net cashflows generated at the end of each year from the extraction and sale of the gold deposits are as follows: a. Based on the financial parameters provided above, compute the following: i Payback Period (5 marks) ii Profitability Index (5 marks) iii Net Present Value (10 marks) iv Internal Rate of Return (10 marks) (Show all workings clearly. Present numbers to 1 decimal place where relevant.) b. Suppose the equipment deployed on the project can likely be sold for 20% of its original cost at the end of the project. Show appropriate workings that quantify the impact of this on the NPV and IRR of the project that you derived in Question la. (10 marks) c. Based on the financial metrics calculated in Part a and Part b above, should ABC undertake this project? Explain the basis of your recommendation. (20 marks) d. Explain how you would incorporate the environmental effects of this project into the financial analysis. How would the outcome of the analysis affect your recommendation above? (10 marks) (Total: 70 marks) Question 2 State 3 risks/ costs of offering credit to customers. For each risk, suggest at least one way the risk/ cost can be mitigated or minimised