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. Select the correct graph for the project's NPV profile.

The correct graph is:

A graph

B graph

C graph

D graph

b. Should the project be accepted if r = 6%? Explain your reasoning.

The project -Select- should / should not be accepted because NPV is -Select- positive / negative.

Should the project be accepted if r = 11%? Explain your reasoning.

The project -Select- should / should not be accepted because NPV is -Select- positive / negative.

c. What is the project's MIRR at r = 6%? Do not round intermediate calculations. Round your answer to two decimal places.

%

What is the project's MIRR at r = 11%? 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 = 6%: $

NPV at r = 11%: $

Does the MIRR method lead to the same accept-reject decision as the NPV method?

The MIRR method -Select- leads / does not lead to the same accept-reject decision as the NPV method.