Question 4: Liberach Inc., is considering investment in a new copper mine in Nevada. The analysts for the company have created estimates for the cash flows of the project (amounts in $Ms, assume yearly cash flows happen at year end):

t=0 = (70)

Y1 = (80)

y2 = 28

y3 = 38

y4 = 50

y5= 50

y6 = 50

y7 = 50

y8 = 38

y= (100)

If the company has a cost of capital of 7.0% (this is a good estimate for the risk-adjusted discount rate of the new copper mine), and earns a return of 7.0% on invested capital,

a. What is the MIRR of this project? Should we invest? (3 pts total)

b. How does the MIRR compare to the IRR of the project? What accounts for the difference? (5 pts total)

c. Construct an NPV profile for this project. (5 pts total)