You own a mining company and are considering opening a new mine. The mine itself will cost $100 million to open. If this money is spent immediately, starting one year from today the mine will generate $20 million for the next 10 years. After that, the lithium will run out and the site must be cleaned and maintained at environmental standards. The annual cleaning and maintenance are expected to cost $1.8 million per year in perpetuity beginning in year 11.

a. What is the NPV of the project and should you invest if the firms cost of capital is 10%?

b. Would you use the IRR rule for evaluating this project? Why or why not?