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The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, This is a golden opportunity.

The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, This is a golden opportunity. The mine will cost $3,900,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $495,000 at the end of the first year, and the cash inflows are projected to grow at 8 percent per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $550,000 at the end of Year 11.
a.
What is the IRR for the gold mine? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
b.
The Utah Mining Corporation requires a return of 8 percent on such projects. Should the mine be opened?
multiple choice
Yes
No

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