A mining company is deciding whether to open a strip mine, which costs $1 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 $12 5 million, payable at the end of Year 2 Select the project's NPV profile The correct sketch is Select ABCDItem 1 Should the project be accepted if WACC 10 Select YesNoItem 2 Should the project be accepted if WACC 20 Select YesNoItem 3 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 YesNoItem 6 Does the MIRR method always lead to the same accept reject decision as NPV (Hint Consider mutually exclusive projects that differ in size ) Select YesNoItem 7 Grade it Now Save Continue Continue without saving

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Question: A mining company is deciding whether to open a strip mine, which costs $1.5 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 $1.5 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 $12.5 million, payable at the end of Year 2.

Select the project's NPV profile. The correct sketch is -Select-ABCDItem 1 .
Should the project be accepted if WACC = 10%? -Select-YesNoItem 2 Should the project be accepted if WACC = 20%? -Select-YesNoItem 3
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-YesNoItem 6 Does the MIRR method always lead to the same accept/reject decision as NPV? (Hint: Consider mutually exclusive projects that differ in size.) -Select-YesNoItem 7

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