Tangshan Mining Company is considering investing in a new mining project. The firm's cost of capital is 12 percent and the project is expected to have an initial after tax cost of $5,000,000. Furthermore, the project is expected to provide after-tax operating cash flows of $2,500,000 in year 1, $2,300,000 in year 2, $2,200,000 in year 3, and ($1,300,000) in year 4.

1) Calculate the project's NPV

2) Calculate the project's IRR

3) Should the firm make the investment

Please include the steps to the solutions

Answer rating: 100% (QA)

Answer Year 1 250000 230000 3 220000 4 130000 Cash Flow 2 PV val... View the full answer