Problem $10-19$

Multiple Rates of Return

The Ulmer Uranium Company is deciding whether or not to open a strip mine whose net cost is $$4\mathrm{.}4$ million. Net cash inflows are expected to be $$27\mathrm{.}7$ million, all coming at the end of Year $1.$ The land must be returned to its natural state at a cost of $$25$ million, payable at the end of Year $2.$

a$.$ Plot the project's NPV profile.

Select the correct graph.

The correct graph is $$

b$.$ Should the project be accepted if $r=9\%?$

project be accepted if $r=15\%?$

Should the project be accepted if $r=15\%?$

c$.$ What is the project's MIRR at $r=9\%?$ Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

What is the project's MIRR at $r=15\%?$ Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

Calculate the two NPVs$.$ Do not round intermediate calculations. Round your answers to the nearest cent.

$1$

$2$

Does the MIRR method lead to the same accept$-$reject decision as the NPV method?