Net Present Value and Internal Rate of Return.

a$)$ You buy a mining site, including exploration rights and there are set up costs of $285m.$ You expect to extract the following value of gold over the next $6$ years, net of running costs: $42m,73m,124m,91m,54m$ and $21m.$ At the end of year $6$ you pay $30m$ clean$-$up costs. The site will then be handed back to authorities $($as worthless$).$ Should you go ahead with the project? The cash flows are discounted at $7\%$ p$.$a$.$

b$)$ By using only linear interpolation or the Newton$-$Raphson method or the secant method $($which you must code$)$ determine the IRR of the project in $3($a$).$

c$)$ Explain what is meant by the internal rate of return $($IRR$)$ in the context of project appraisal. What are the drawbacks of the IRR method?