Answer Happy

You own a coal mining company and are considering opening a new mine. The mine will cost $116.5 million to open If this money is spent immediately, the mine will generate $20.4 million for the next 10 years. After that, the coat will run out and the site must be cleaned and maintained at environmental standards. The cleaning and maintenance are expected to cost $1.7 million per year in perpetuity What does the IRR rule say about whether you should accept this opportunity? If the cost of capital is 8.1%, what does the NPV rule say? NPV (min) NPV of the investment in the Coal Mine DecountRate() a B GIED What does the IRR rule say about whether you should accept this opportunity? (Select the best choice below) A. There are two IRRs, so you cannot use the IRR as a criterion for accepting the opportunity OB. Reject the opportunity because the IRR is lower than the 0.1% cost of capital OC. The IRR is 10.56%, so accept the opportunity. 23 jak komercd