Question: A mining company is deciding whether to open a strip mine, which costs $2.5 million. Cash inflows of $13.5 million would occur at the end

A mining company is deciding whether to open a strip mine, which costs $2.5 million. Cash inflows of $13.5 million would occur at the end of Year 1. The land must be returned to its natural state at a cost of $11.5 million, payable at the end of Year 2. a. Select the project's NPV profile. B NPV Millions of Dollars 2.5 NPV Millions of Dollars NPV (Milions of Dollars 23 1 15 1.5 0.9 - 0.5 0.5 05 100 200 300 400 500 100 200 300 400 100 200 300 400 WACC% 500 WA CC%) WACC%) D NPV Millions of Dollars 2.5 1.5 0.5 0.5 100 200 300 400 500 WACC% The correct sketch is B B b. Should the project be accepted if WACC = 10% Yes Should the project be accepted if WACC = 20%? Yes c. 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- Does the MIRR method always lead to the same accept/reject decision as NPV? (Hint: Consider mutually exclusive projects that differ in size.) -Select
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