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 hillion at Year 0 to mitigate the environmental problem, but it would not be required to do so. Developing the mine (without mitigation) would require an $21 milion per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $22 million. The risk-adjusted wacC is 11%. Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. two decimal places. Calculate the NPV and IRR without mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. to two decimal places. NPV: 5 million IRR: b. How should the environmental effects be dealt with when this project is evaluated? 1. The environmental effects if not mitigated could result in additional loss of cash flows and/or fines and penalties due to ill will among customers, commun mittipation, the company needs to make sure that they have anticipated all costs in the "no mitigation" analysis from not doing the environmental mitigati. II. The environmental effects should be ignored since the mine is legal without mitigation. iil. The environmental effects should be treated as a sunk cost and therefore ignored. IV. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits v. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur: c. Should this project be undertaken? Stilect- If so, should the firm do the mitigation? 1. Under the assumption that all costs havo been considered, the company would not mitigate for the environmental impact of the project since its IRR without are induded in the analysis. 11. Under the assumption that all conts have been considered, the company would mitigate for the environmental impact of the project since its NPV with mitigatk not induded in the analysis. III. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its NPV without costs are induded in the analysis. iv. Under the assumption that all costs have been considered, the company would mitigate for the environmental impact of the project since its IRR with mitigation nok induced in the analysis. v. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its NPV with mitiga are not included in the analysis. ject. Because the mine has recelved a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional 510.33 ntal problem, but it would not be required to do so. Developing the mine (without mitigation) would require an initial outlay of $63 million, and the expected cash infows woul ion. Enter your answer for NPV in mililons. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Fround your answers to Nitigation. Enter your answer for NPV in minions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers Eta be dealt with when this project is evaluated? t. mitigoted could result in additional lost of cash flows and/or fines and penaities due to ill wili among customers, community, etc. Therefore, even though the mine is legal without. to make sure that they have anticipated anll costs in the "no mitigation" analysis from not soing the enivironmental mitigation. uld be ignored since the mine is legal without mitigation. iuld be treated as a sunk cost and therefore ignored. hot mitigated would rewite in additional cash fows. Therefere, since the mine is legal witheut mitigation, there are no beneits to gerforming a "no mitigation" analyais. ould be treated as a remote possibility and should only be considered at the time in which they actually occur. all cows hove been considered, the compary would not mitigate for the environmental impact of the progect since its ith without mitigation is greater than its rise when mitigation ceics tall costs have been convdered, the compary would mitbate for the envirenmental impect of the project since its NDV with meigation is greater than as NeY when mitigation couss are all coste have been considered, the compeny would not mitigste for the environmental impact of the project since its NPV wahout mizigation is greater than its NeV when mitgatian onaiysis. analyms