4(a) Expected cash flows for a strip-mining project are estimated as shown below. 7 8 End of 0 year Cash -100,000 flow 20,000 100.000 100.000 50,000 50,000 50,000 50,000 -350,000 A startup cost is incurred immediately. The income exceeds outlays for the next 7 years. During the 8th year, the major cost is for landscape improvement. Does the strip mining project appear to be a profitable investment? On the basis of past experience, the mining company wishes to use MARR of 40%. Also, the company is keen on finding out the internal rate-of-return (i.e. IRR). NOTE: Check for dual rates of return. 4(b) You have an opportunity to buy a bond with a face value of $10,000 and coupon rate of 14%, payable semi-annually. NOTE: Interest per 6-month period is 7% of Face Value (ie. $10,000x0.07 = $700 per 6-month period). (i) If the bond matures in five years and you can currently buy one for $8,000, what is your IRR for this investment? (ii) If your MARR for this type of investment is 20%, should you buy the bond