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this is one question pls answer all parts a,b,c *couldn't fit in one picture! Ch 11: End-of-Chapter Problems - The Basics of Capital Budgeting a.

this is one question pls answer all parts a,b,c
*couldn't fit in one picture! image text in transcribed
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Ch 11: End-of-Chapter Problems - The Basics of Capital Budgeting a. Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places. NPV; $ IRR million NPV: S % Calculate the NPV and IRR without mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round Intermediate calculations. Round your answers to two decimal places. million IRR: b. How should the environmental effects be dealt with when this project is evaluated? 1. The environmental effects if not mitigated could result in additional loss of cash flows and/or fines and penalties due to ill will among customers, community, etc. Therefore, even though the mine is legal without mitigation, the company needs to make sure that they have anticipated all costs in the "no mitigation analysis from not doing the environmental mitigation. % II. The environmental effects should be ignored since the mine is legal without mitigation. III. The environmental effects should be treated as a sunk cost and therefore ignored. IV. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits to performing a "no mitigation" analysis. V. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur. -Seled- c. Should this project be undertaken? Seact- The project should not be undertaken under the "no mitigation assumption The project should be undertaken only under the wo mitigation assumption The project should not be undertaken under the mitigation assumption Even when mitigation le considered the project has a positive NPV, so it should be undertaken water thanute y would not mitigate for the environmental impact of the project since its IRR without the analysis. y would mitigate for the environmental impact of the project since its NPV with mitigation Flagated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits to performing a 'no mitigation" analysis. V. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur. -Select- c. Should this project be undertaken? If so, should the firm do the mitigation? 1. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its IRR without mitigation is greater than its IRR when mitigation costs are included in the analysis. II. Under the assumption that all costs have been considered, the company would mitigate for the environmental impact of the project since its NPV with mitigation is greater than its NPV when mitigation costs are not included in the analysis. III. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its NPV without mitigation is greater than its NPV when mitigation costs are included in the analysis. IV. Under the assumption that all costs have been considered, the company would mitigate for the environmental impact of the project since its IRR with mitigation is greater than its IRR when mitigation costs are not included in the analysis. v. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its NPV with mitigation is greater than its NPV when mitigation costs are not included in the analysis. Grade it Now Save & Continue 0 Ch 11: End-of-Chapter Problems - The Basics of Capital Budgeting a. Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places. NPV; $ IRR million NPV: S % Calculate the NPV and IRR without mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round Intermediate calculations. Round your answers to two decimal places. million IRR: b. How should the environmental effects be dealt with when this project is evaluated? 1. The environmental effects if not mitigated could result in additional loss of cash flows and/or fines and penalties due to ill will among customers, community, etc. Therefore, even though the mine is legal without mitigation, the company needs to make sure that they have anticipated all costs in the "no mitigation analysis from not doing the environmental mitigation. % II. The environmental effects should be ignored since the mine is legal without mitigation. III. The environmental effects should be treated as a sunk cost and therefore ignored. IV. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits to performing a "no mitigation" analysis. V. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur. -Seled- c. Should this project be undertaken? Seact- The project should not be undertaken under the "no mitigation assumption The project should be undertaken only under the wo mitigation assumption The project should not be undertaken under the mitigation assumption Even when mitigation le considered the project has a positive NPV, so it should be undertaken water thanute y would not mitigate for the environmental impact of the project since its IRR without the analysis. y would mitigate for the environmental impact of the project since its NPV with mitigation Flagated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits to performing a 'no mitigation" analysis. V. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur. -Select- c. Should this project be undertaken? If so, should the firm do the mitigation? 1. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its IRR without mitigation is greater than its IRR when mitigation costs are included in the analysis. II. Under the assumption that all costs have been considered, the company would mitigate for the environmental impact of the project since its NPV with mitigation is greater than its NPV when mitigation costs are not included in the analysis. III. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its NPV without mitigation is greater than its NPV when mitigation costs are included in the analysis. IV. Under the assumption that all costs have been considered, the company would mitigate for the environmental impact of the project since its IRR with mitigation is greater than its IRR when mitigation costs are not included in the analysis. v. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its NPV with mitigation is greater than its NPV when mitigation costs are not included in the analysis. Grade it Now Save & Continue 0

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