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Please show formula 21. You own a coal mining company and are considering opening a new mine. The mine will cost $120 milion to open.
Please show formula
21. You own a coal mining company and are considering opening a new mine. The mine will cost $120 milion to open. If this money is spent immediately, the mine will generate $20 million for the next 10 years. After that, the coal will run out and the site must be cleaned and maintained at environmental standards. The cleaning and maintenance are expected to cost $2 million per year in perpetuity. What does the IRR rule say about whether you should accept this opportunity? If the cost of capital is 896, what does the NPV rule sayStep by Step Solution
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