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The Ulmer Uranium Company is deciding whether or not to open a strip mine whose net cost is $4.4 million. Net cash inflows are expected
The Ulmer Uranium Company is deciding whether or not to open a strip mine whose net cost is $4.4 million. Net cash inflows are expected to be $27.7 million, all coming at the end of Year 1. The land must be returned to its natural state at a cost of $25 million, payable at the end of Year 2. a. Plot the project's NPV profile. Select the correct graph. 1qg 2gq Discount Rate (%) [Discount Rate (%) 1gg 2gq Discount Rate (%) 1 gg 2gq 1-1 Discount Rate % () The correct graph is -Select- v. b. Should the project be accepted if r = 9%? Explain your reasoning. The project |-select-v] be accepted because NPV is|-select- v] - Should the project be accepted if r = 12%? Explain your reasoning. The project |-select- v be accepted because NPV is-select- v] - c. What is the project's MIRR at r = 9%? Do not round intermediate calculations. Round your answer to two decimal places. s What is the project's MIRR at r = 12%? Do not round intermediate calculations. Round your answer to two decimal places. Calculate the two projects' NPVs. Do not round intermediate calculations. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if any. NPV at r = 9%: $ NPV at r = 12%: $ Does the MIRR method lead to the same accept-reject decision as the NPV method? The MIRR method -Select- v | to the same accept-reject decision as the NPV method
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