You own a coal mining company and are considering opening a, Ask an Expert

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You own a coal mining company and are considering opening a new mine. The mine itself will cost $ 116.6 million to open. If this money is spent? immediately, the mine will generate $19.7million for the next 10 years. After? that, the coal will run out and the site must be cleaned and maintained at environmental standards. The cleaning and maintenance are expected to cost $ 1.8million per year in perpetuity. What does the IRR rule say about whether you should accept this? opportunity? If the cost of capital is 8.5 %, what does the NPV rule say?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93056190

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