12. Problem 11.19 Click here to read the eBook: Multiple Internal Rates of Retum Click here to read the eBook: Modified Internal Rate or Retum (MIRR) MULTIPLE IRRS AND MIRR A mining company is deciding whether to open a strip mine, which costs $2.5 million. Cash inrows of $12.5 million would occur at the end of Year 1. The land must be returned to its natural state at a cost of $12.5 million, payable at the end of Year 2. a. Plot the project's NPV profile A B B D NPV Milo Dead NPV Millor of Doled 3 2.5 2 1.5 NPV IM of Dolls 3 2.5 2 NPV ( of Dollad) 3 2.5 25 15 1 0.5 + 1.5 0.5 0.5 0.5 0.5 0.5 . 0.5 do 200 300 WACC) (% ide 200 300 400 WACC) 200 de 400 WACCI%) 100 do de 400 WACC) The correct sketch is -Select- b. Should the project be accepted if WACC - 10%? Select Should the project be accepted it WACC - 20%? -Select- C. Think of some other capital budgeting situations in which negative cash flows during or at the end of the project's life might lead to multiple IRRs. The input in the box below will not be graded, but may be reviewed and considered by your instructor d. What is the project's MIRR at WACC = 10%? Round your answer to two decimal places. Do not round your intermediate calculations. Yo What is the project's MIRR at WACC - 20%? Round your answer to two decimal places. Do not round your intermediate calculations, Dars MIRR lead to the same accept/reject decision for this project as the NPV methad? -Select- nors the MIRR method always lead to the same accept/reject decision as NPV? (Hint: Consider mutually exclusive projects that differ in size.) -Select YRA Na