Question: please be thorough and i will like and support thank you A mining company is considering a new project. Because the mine has received a

A mining company is considering a new project. Because the mine has received a putemit, the project would be legal; but it would cause significant harm to a nearby rivo The firm could spend an additional $9.66 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. Developing the nine (without mitigation) would require an initial outlay of $57 million, and the expected cash inflows would be $10 million per year for 5 years. If the form does invest in motigation, the annual inflows would be $20 million. The risk adjusted WACCI 13%. a. Calculate the NPV and TRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10:55. Do not round intermediate calculations. Round your answers to two decimal places million TRR: Calculate the NPV and IRR without mitigation Enter your answer for NPV s millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not found intermediate calculations. Round your answers to two decimal places NPV: milion NPV: 5 IRR: b. How should the environmental effects be dealt with when this project is evaluated? 1. The environmental effects if not mitigated could result in additional loss of cash flows and/or fines and penalties due to ill will among customers, community, etc. Therefore, even though the mine is legal without mitigation, the company needs to make sure that they have anticipated il costs in the "no mitigation analysis from not doing the environmental mitigation 11. The environmental effects should be ignored since the mine is legal without mitigation 11. The environmental effects should be treated as a sunk cost and therefore ignored IV. The ironmental effects of rot mitigated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits to performing to mitigation analysis the environmental effects should be treated as a remote ponubility and should only be considered at the time in which they actually on should this project be undertaken If so, should fim de the nation 1. Under the assumption that all posts have been considered the company would not mabigate for the environmental impact of the proti SIRR without mitigation ters 9-12 Therefore, even though the mine is legal without mitigation, the company needs to make sure that they have anticipated all costs in the 'no mitigation analysis from not doing the environmental mitigation it. The environmental effects should be ignored since the mine is legal without mitigation 111. The environmental effects should be treated as a sunk cost and therefore ignored TV. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the mine a legal without mitigation, there are no benefits to performing a "no mitigation" analysis V. The environmental effects should be treated as a remote postability and should only be considered at the time in which they actunily occur. Select Should this project be undertaken? Select If so, should the firm do the mitigation? 1. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its IRR without mitigation greater than its IRR when mitigation costs are included in the analysis II. Under the assumption that all costs have been considered, the company would mitigate for the environmental impact of the project since its NPV with mitigation is greater than its NPV when mitigation costs are not included in the analysis, III. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its NPV without mitigation is greater than its NPV when mitigation costs are included in the analysis IV. Under the assumption that all costs have been considered, the company would mitigate for the environmental impact of the project since its IRR with mitigation is greater than its IRR when mitigation costs are not included in the analysis. V. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its NPV with mitigationis greater than its NPV when mitigation costs are not included in the analysis -Select
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