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Eclipse Corp. is considering taking over a contaminated building site on a former mining site....

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Accounting

Eclipse Corp. is considering taking over a contaminated building site on a former mining site. In exchange for $10,000,000 from the mining company now, Eclipse will invest $8,000,000 per year for the following 3 years to clean up the site. Once the site is clean at the end of year 3, it will receive a further $15,000,000 from the mining company. Over the following 2 years, Eclipse will invest $5,000,000 per year to construct a race-track on the site. The new track will last forever and net $1,000,000 per year for Eclipse from gambling revenues starting at the end of year 6. If Eclipse's MARR is 10%, what is the exact ERR for this project? Should Eclipse proceed with the project?

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