Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Strip Mining Inc, can develop a new mine at an initial cost of $13 million. The mine will provide a cash flow of 540 million
Strip Mining Inc, can develop a new mine at an initial cost of $13 million. The mine will provide a cash flow of 540 million in 1 year. The land then must be reclaimed at a cost of $30 million in the second year a. What are the IRRs of this project? (Enter your answers in ascending order. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) IRR 1 IRR2 % b. Should the firm develop the mine if the discount rate is 25%? 35% 60% 100%? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions rounded to 3 decimal places.) Discount Rate NPV Develop? 25% 35% million million million million 60% 10096
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started