Integrative: Complete investment decisionWith the market price of gold at

C$1,562.50

per ounce (C$ stands for Canadian dollars), Maritime Resources Corp., a Canadian mining firm, would like to assess the financial feasibility of reopening an old gold mine that had ceased operations in the past due to low gold prices. Reopening the mine would require an up-front capital expenditure of

C$68.1

million and annual operating expenses of

C$19.41

million. Maritime expects that over a 5-year operating life it can recover

173,000

ounces of gold from the mine and that the project will have no terminal value. Maritime uses straight-line depreciation, has a

22.46%

corporate tax rate, and has a(n)

11.1%

cost of capital. Before moving forward with the project, Maritime would like to determine the sensitivity of its capital budgeting decision to the market price of gold, which could fluctuate over the 5-year period.a. Calculate the internal rate of return (IRR) for the gold mine project if the price of gold drops

10%.

b. Calculate the net present value (NPV) for the gold mine project if the price of gold drops

10%.

c. Calculate the internal rate of return (IRR) for the gold mine project if the price of gold drops

20%.

d. Calculate the net present value (NPV) for the gold mine project if the price of gold drops

20%.

e. Below what price per ounce of gold is Maritime's reopening of its old mine no longer acceptable?

a. If the price of gold drops

10%,

the internal rate of return (IRR) for the gold mine project is

nothing%.

(Round to two decimal places.)b. If the price of gold drops

10%,

the net present value (NPV) for the gold mine project is

$nothing.

(Round to the nearest cent.)c. If the price of gold drops

20%,

the internal rate of return (IRR) for the gold mine project is

nothing%.

(Round to two decimal places.)d. If the price of gold drops

20%,

the net present value (NPV) for the gold mine project is

$nothing.

(Round to the nearest cent.)e. Maritime's reopening of its old mine no longer acceptable once the price per ounce of gold is

$nothing.

(Round to the nearest cent.)