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You are getting ready to start a new project that will incur some cleanup and shutdown costs when it is completed. The project costs $5.4

You are getting ready to start a new project that will incur some cleanup and shutdown costs when it is completed. The project costs $5.4 million up front and is expected to generate $1.1 million per year for 10 years and then have some shutdown costs in year 11. Use the MIRR approach to find the maximum shutdown costs you could incur and still meet your cost of capital of 15% on this project. Upfront costs ($5,400.00) (in thousands of $) Annual cash flows $1,100.00 Coupon rate 15% Number of years of inflows 10 Present value of cash inflows Difference (not including shutdown costs) Future value of difference Maximum shutdown costs (check)

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