The UUC Ltd is deciding whether it should go ahead with a new project, a mining venture. The

Net Cost of which is Tshs $200$ million. Net cash inflows are expected to be Tshs $1,300$ million,

all, coming at the end of year $1.$ The land must be returned to its natural state at a cost of Tshs

$1,200$ million, payable at the end of Year $2.$

$($a$)$ Plot the project$$s NPV profile $($Hint: Calculate NPV at k $=0,10\%,80\%,$

and $450\%,$ and possibly at other k values$)$

$($b$)$ Should the project be accepted if k $=10\%?$ If k $=20\%?$ Explain your

reasoning.

$($c$)$ Can you think of some other Capital Budgeting situations in which

Negative Cash Flows or at the other end of the project$$s life might lead to

Multiple IRRs?

$($d$)$ What is the project$$s MIRR at k $=10\%?$ At k $=20\%?$ Does the MIRR

method lead to the same accept$/$reject decision as the NPV method