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You own a coal mining company and are considering opening a new mine. The mine will cost 116.9 million to open. If this money is
You own a coal mining company and are considering opening a new mine. The mine will cost 116.9 million to open. If this money is spent immediately, the mine will generate 20.3 million for the next 10 years. After that, the coal will run out and the site must be cleaned and maintained at environmental standards. The cleaning and maintenance are expected to cost 1.6 million per year in perpetuity. If the cost of capital is 8.3%, what does the NPV rule say?
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