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A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby rives. The firm could spend an additional $9.66 million at Year to mitigate the environmental Problem, but it would not be required to do so. Developing the mine (without mitigation) would require an initial outlay of $57 million, and the expected cash inflows would be $19 milion per year for 5 years. If the firm does invest in mitigation, the annual inflows would be 520 million. The risk-adjusted WACC is 12% . Calculate the NPV and IRR with mitigation. Enter your answer for NPV in minions. 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 NPV:5 million TRR: Calculate the NPV and IRR without mitigation. Enter your answer for NPV in milions. 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 NPV: 5 million TRR: b. How should the environmental effects be dealt with when this project is evaluated? I The environmental effects if not mitigated could result in additional loss of cash flows and/or fines and penalties due to will among customers, community, etc Therefore, even though the mine is legal without mitigation, the company needs to make sure that they have anticipated all costs in the Tho mitigation analysis from not doing the environmental mitigation II. The environmental effects should be ignored since the mine is legal without mitigation II. The environmental effects should be treated as a sunk cost and therefore lonored IV. The environmental effects ir not mitigated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits to performing a 'no mitigation analysis. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur B c. Should this project be undertaken? c. 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 is greater than its TRR when mitigation costs are included in the analysis. 11. 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 t. 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 TR with mitigation is greater than its IAR when mitigation costs are not included in the analysis Under the msumption that all costs have been considered the company would not mitonte 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 Saint

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