Multiple Rates of Return

The Ulmer Uranium Company is deciding whether or not to open a strip mine whose net cost is $$4\mathrm{.}4$ million. Net cash inflows are expected to be $$27\mathrm{.}7$ million, all coming at the end of Year $1.$ The land must be returned to its natural state at a cost of $$25$ million, payable at the end of Year $2.$

Select the correct graph for the project's NPV profile.

The correct graph is

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$.$

Should the project be accepted if r $=7\%?$ Explain your reasoning.

The project

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be accepted because NPV is

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$.$

Should the project be accepted if r $=15\%?$ Explain your reasoning.

The project

$-$Select$-$

be accepted because NPV is

$-$Select$-$

$.$

What is the project's MIRR at r $=7\%?$ Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

What is the project's MIRR at r $=15\%?$ Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

Calculate the two projects' NPVs$.$ Do not round intermediate calculations. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if any.

NPV at r $=7\%$: $

NPV at r $=15\%$: $

Does the MIRR method lead to the same accept$-$reject decision as the NPV method?

The MIRR method

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to the same accept$-$reject decision as the NPV method.