Question: Strip Mining Inc. can develop a new mine at an initial cost of $9 million. The mine will provide a cash flow of $34 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 $9 million. The mine will provide a cash flow of $34 million in 1 year. The land then must be reclaimed at a cost of $30 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 % b. Should the firm develop the mine if the discount rate is 35%? 45%? 120%? 160%? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions rounded to 3 decimal places.) NPV Develop? million Discount Rate 35% 45% 120% 160% million million million

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Strip Mining Inc. can develop a new mine at an initial cost of $12 million. The mine will provide a cash flow of $35 million in 1 year. The land then must be reclaimed at a cost of $24 million in the...

Strip Mining Inc. can develop a new mine at an initial cost of $11 million. The mine will provide a cash flow of $34 million in 1 year. The land then must be reclaimed at a cost of $25 million in the...

Old MathJax webview please help Check my work 2 Strip Mining Inc. can develop a new mine at an initial cost of $8 million. The mine will provide a cash flow of $30 million in 1 year. The land then...

Hi, can u help me figure out problem 34. Growth Enterprises believes its latest project, which will cost $80,000 to install, will generate a perpetual growing stream of cash flows. Cash flow at the...

O lu. 1:1 FINA 306 MINICASE EXCEL Spring... A Administrative matters 1. Assignment will be done by using Microsoft Excel and Word. 2. The deadline for the assignment is 13th May, 2020, Wednesday....

Strip Mining Inc. can develop a new mine at an initial cost of $11 million. The mine will provide a cash flow of $39 million in 1 year. The land then must be reclaimed at a cost of $32 million in the...

Strip Mining Inc. can develop a new mine at an initial cost of $5 million. The mine will provide a cash flow of $30 million in year 1 . The land then must be reclaimed at a cost of $28 million in the...

9 Chapter 8 0 Savnet Help Save & Exit 2 Check my Strip Mining Inc. can develop a new mine at an initial cost of $15 million The mine will provide a cash flow of $42 million in 1 year. The land then...

both Strip Mining Inc. can develop a new mine at an initial cost of $5 million. The mine will provide a cash flow of $30 million in year 1 . The land then must be reclaimed at a cost of $28 million...

Strip Mining Inc. can develop a new mine at an initial cost of $8 million. The mine will provide a cash flow of $33 million in 1 year. The land then must be reclaimed at a cost of $31 million in the...

Modify the rate-based model of (12-4) to (12- 18) to include a chemical reaction in the liquid phase under conditions of: (a) Chemical equilibrium (b) Kinetic rate law.

Gloconeogensis is a process that the body uses to generate glucose when blood sugar falls too low. True or false ?

The following end - of - year account balance information is from the accounting records of Smithfield Company. Use these data to prepare the closing entries for the year. Which ONE of the following...

please help solving this. 1) (6 points) A retailer consistently sells about 1800 products per month. Each order has a setup cost of $100, a lead time of 4 days and the annual holding cost is $3 per...

1. Form groups of fi ve to seven. Have one third of groups use the linear model of communication to describe communication in your class. Have one third of groups use an interactive model to describe...

4. How do diff erent models represent the process of human communication?

3. Go to the placement offi ce on your campus and examine descriptions of available positions. Record the number of job notices that call for communication skills.