NPV and IRR Analysis After discovering a new gold vein in the Colorado mountains, OTC Mining Corporation must decide whether to go ahead and develop the deposit. The most cost-effective method of mining gold is sulfuric acid extraction, a process that could result in environmental damage. Before proceeding with the extraction, CTC must spend $900,000 for new roining equipment and pay $165,000 for its installation. The mined gold will not the firm an estimated $350,000 each year for the 5-year life of the vein CTC's cost of capital is 20%. For the purposes of this problem, assume that the cash inflows occur at the end of the year a What is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest dollar. Use a minus sign to enter negative value, it any $ What is the project's ERR? Do not round intermediate calculations Round your answer to two deomal places % b. Should this project be undertaken environmental impacts were not consideration Select C. How should environmental offects be considered when evaluating this or any other project 1. Environmental offects could be added by estimating penalties or any other cach outlows that might be imposed on the firm to help roturn the land to its previous state of possible) 11. Environmental effects should be ignored since they would have no effect on the project's profitability III. Environmental effects should be treated as sunk costs Select V and IRR Analysis ter discovering a new gold vein in the Colorado mountains, CTC Mining Corporation must decide whether to go ahead and develop the Eposit. The most cost-effective method of mining gold is sulfuric acid extraction, a process that could result in environmental damage efore proceeding with the extraction CTO must spend $900,000 for new mining equipment and pay $165,000 for its installation. The ined gold will be the firm an estimated $350,000 each year for the 5-year life of the vein. To's cost of capital is 20%. For the purposes of this problem assume that the cash inflows occur at the end of the Year a. What is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest dollar. Use a minus sign to enter negative value, if any $ What is the project's IRR? Do not round intermediate calculations. Round your answer to two decimal places b. Should this project be undertaken it environmental impacts were not a consideration Select C. How should environmental effects be considered when evaluating this, or any other project 1. Environmental effects could be added by estimating penalties or any other cash outflows that might be imposed on the firm to help return the land to its previous state it possible 11. Environmental effects should be anored since they would have no effect on the project's profitability III. Environmental facts should be treated as sunt costs -Select
