The L-S Mining Company is planning to open a new strip mine in western Pennsylvania. The net investment required to open the mine is $13 million. Net cash flows are expected to be +$22 million at the end of year 1 and +$7 million at the end of year 2. At the end of year 3, L-S will have a net cash outflow of $17 million to cover the cost of closing the mine and reclaiming the land.

1. Calculate the net present value of the strip mine if the cost of capital is 2, 6, 9, 15, 42, and 81 percent. Enter your answers in millions. For example, an answer of $1.20 million should be entered as 1.20, not 1,200,000. Round your answers to two decimal places.

   k	NPV
   2%	$ million
   6%	$ million
   9%	$ million
   15%	$ million
   42%	$ million
   81%	$ million

2. What is unique about this project?

   The NPV is negative at discount rates between -Select-0269154281Item 7 % and -Select-0269154281Item 8 %, positive from -Select-0269154281Item 9 % to -Select-0269154281Item 10 % and negative beyond -Select-0269154281Item 11 %.

3. Should the project be accepted if L-S's cost of capital is 6 percent?

   If L-S's cost of capital is 6%, the project is -Select-unacceptableacceptableItem 12 .

   Calculate the net present value of the strip mine if the cost of capital is 70 percent. $ million

   Should the project be accepted if L-S's cost of capital is 70 percent?

   If L-S's cost of capital is 70%, the project is -Select-unacceptableacceptableItem 14 .