OA-90% OB. -100% OC. -110% OD. -70%

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A mining company plans to mine a beach for rutile. To do so will cost $16 million up front and then produce cash flows of $9 million per year for five years. At the end
of the sixth year the company will incur shut-down and clean-up costs of $8 million. If the cost of capital is 14%, then what is the MIRR for this
project?
OA. -90%
OB. -100%
OC. -110%
OD. -70%
Transcribed Image Text:A mining company plans to mine a beach for rutile. To do so will cost $16 million up front and then produce cash flows of $9 million per year for five years. At the end of the sixth year the company will incur shut-down and clean-up costs of $8 million. If the cost of capital is 14%, then what is the MIRR for this project? OA. -90% OB. -100% OC. -110% OD. -70%
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