A mining company is deciding whether to open a strip mine with an initial outlay at t 0 of $2 million Cash inflows of $13 5 million would occur at the end of Year 1 The land must be returned to its natural state so there is a cash outflow of $12 million, payable at the end of Year 2 Select the project's NPV profile The correct sketch is Select ABCD Should the project be accepted if WACC 10 Select YesNo Should the project be accepted if WACC 20 Select YesNo What is the project's MIRR at WACC 10 Do not round intermediate calculations Round your answer to two decimal places What is the project's MIRR at WACC 20 Do not round intermediate calculations Round your answer to two decimal places Does MIRR lead to the same accept reject decision for this project as the NPV method Select YesNo Does the MIRR method always lead to the same accept reject decision as NPV ( Hint Consider mutually exclusive projects that differ in size ) Select YesNo

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Question: A mining company is deciding whether to open a strip mine with an initial outlay at t = 0 of $2 million. Cash inflows of

A mining company is deciding whether to open a strip mine with an initial outlay at t = 0 of $2 million. Cash inflows of $13.5 million would occur at the end of Year 1. The land must be returned to its natural state so there is a cash outflow of $12 million, payable at the end of Year 2.

Select the project's NPV profile.

The correct sketch is -Select-ABCD .
Should the project be accepted if WACC = 10%?

-Select-YesNo

Should the project be accepted if WACC = 20%?

-Select-YesNo
What is the project's MIRR at WACC = 10%? Do not round intermediate calculations. Round your answer to two decimal places.

%

What is the project's MIRR at WACC = 20%? Do not round intermediate calculations. Round your answer to two decimal places.

%

Does MIRR lead to the same accept/reject decision for this project as the NPV method?

-Select-YesNo

Does the MIRR method always lead to the same accept/reject decision as NPV? (Hint: Consider mutually exclusive projects that differ in size.)

-Select-YesNo

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