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A mining company is considering a new project. Because the mine has received a permit, the...

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Finance

A mining company is considering a new project. Because the minehas received a permit, the project would be legal; but it wouldcause significant harm to a nearby river. The firm could spend anadditional $10 million at Year 0 to mitigate the environmentalProblem, but it would not be required to do so. Developing the mine(without mitigation) would cost $60 million, and the expected cashinflows would be $20 million per year for 5 years. If the firm doesinvest in mitigation, the annual inflows would be $21 million. Therisk-adjusted WACC is 12%.

  1. Calculate the NPV and IRR with mitigation. Round your answers totwo decimal places. Do not round your intermediate calculations.Enter your answer for NPV in millions. For example, an answer of$10,550,000 should be entered as 10.55.
    NPV $ million
    IRR %

    Calculate the NPV and IRR without mitigation. Round your answersto two decimal places. Do not round your intermediate calculations.Enter your answer for NPV in millions. For example, an answer of$10,550,000 should be entered as 10.55.
    NPV $ million
    IRR %

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