According to the promoter, Mr. Patrick Zulu, “This is a golden opportunity.” The mine will cost K900,000 to open and will have an economic life of 11 years. It will generate a cash inflow of K100,000 at the end of the first year, and the cash inflows are projected to grow at 8 percent per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be K50,000 at the end of year 11.

What is the IRR for the gold mine?

Answer rating: 100% (QA)

Lets break this down stepbystep The mine will cost K900000 to open The ... View the full answer