• Strip Mining, Inc. has a required rate of return of 16% on new investments. It can develop a new mine at an initial cost of $5 million. The mine would provide a cash flow of $30 million in 1 year. The land then must be reclaimed at a cost of $28 million in the second year.
• How many IRRs will this project have?
• What will be all of the IRRs for this project?
• What will be the MIRR of the mine if we bring all negative cash flows to the present and incorporate them into the initial cash outflow?
• What will be the MIRR of the mine if we send all the future cash flows to the end of the timeline?
• What will be the MIRR of the mine if we send all the negative cash flows to the present and incorporate them into the initial cash outflow and we send all the positive cash flows to the end of the timeline?
• Would you accept this project based on those MIRR computations?