Question
Imperial Copper Corp. (ICC) is considering a mining project. ICC will have to pay an initial cost of $4.55 million in the current period. The
Imperial Copper Corp. (ICC) is considering a mining project. ICC will have to pay an initial cost of $4.55 million in the current period. The project will then generate revenues of $3.5 million per year for the next three years. During the fourth year, there will be clean-up costs of $ 6 million to restore the land to its original state, after which the mine will be shut down. The NPV of the project will be _________ if the interest rate is 14% and ______________ if the interest rate is 18%. (Draw a timeline of the cashflows)
A) $20,256.53; -$10,677.93
B) $19,337.45; $100.56
C) $12,004.82; -$56,223.48
D) $23,230.43; -$34,777.99
E) $28,263.50; $235.29
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