Question: Strip Mining Inc, can develop a new mine at an initial cost of $14 million. The mine will provide a cash flow of $41 million

Strip Mining Inc, can develop a new mine at an initial

Strip Mining Inc, can develop a new mine at an initial cost of $14 million. The mine will provide a cash flow of $41 million in 1 year. The land then must be reclaimed at a cost of $29 million in the second year. a. What are the IRRs of this project? (Enter your answers in ascending order. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) IRR 1 % IRR 2 % ES b. Should the firm develop the mine if the discount rate is 14%? 24%? 60%? 100%? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions rounded to 3 decimal places.) Discount Rate NPV Develop? million 24% million 60% million 100% million

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