A mining company is deciding whether to open a strip mine with an initial outlay at t = 0 of $2.5 million. Cash inflows of $13 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 $12.5 million, payable at the end of Year 2.

1. Select the project's NPV profile.

1. Should the project be accepted if WACC = 10%?

   Should the project be accepted if WACC = 20%?

2. 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?

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

NPV Millions of Dollars 3 2.5 2 1.5 0.5 0 0.5 100 200 300 400 500 WA CC % B NPV Millions of Dollars 3 2.5 2 1.5 1 0.5 0 0.5 100 200 300 400 500 WA CC % ***** C NPV Millions of Dollars 3 2.5 2 1.5 1 0.5 0 0.5 100 200 300 400 500 WA CC % ***** D NPV Millions of Dollars 3 2.5 2 1.5 1 0.5 0.5 100 200 300 1 200__500 WA CC(%