Capital budgeting criteria-ethical considerations

Assignment Help Financial Management

Reference no: EM131498136

Capital budgeting criteria: ethical considerations

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 river. The firm could spend an additional $11 million at Year 0 to mitigate the environmental Problem, but it would not be required to do so. Developing the mine (without mitigation) would cost $69 million, and the expected net cash inflows would be $23 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $24 million. The risk-adjusted WACC is 10%.

Calculate the NPV and IRR with mitigation. Round your answers to two decimal places. Do not round your intermediate calculations. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55.

NPV $ million

IRR %

Calculate the NPV and IRR without mitigation. Round your answers to two decimal places. Do not round your intermediate calculations. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55.

NPV $ million

IRR %

Reference no: EM131498136

Questions Cloud

Considering two projects for inclusion in its capital budget : Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis.

How should the company recognize revenue : How should the company recognize revenue based upon the two possible FOB contract structures mentioned in the case? Why?

And what are the keys to advancing the black community : Why does the Black community have a hard time advancing in society? And what are the keys to advancing the Black community

What is bad boys cost of capital : Bad Boys, Inc. is evaluating its cost of capital. Under consultation, Bad Boys, Inc. expects to issue new debt at par with a coupon rate of 8% and to issue.

Capital budgeting criteria-ethical considerations : Calculate the NPV and IRR with mitigation. Calculate the NPV and IRR without mitigation.

Express each year income statement in common-size percentage : A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year Last Year Sales.

Describe the scientific advances during renaissance : 2. Describe the scientific advances during renaissance with particular reference to the new scientific method, rationalism and empiricism.

Discuss the qualities that person shares with other heroes : Discuss the qualities that person shares with other heroes and what qualities set him or her apart from them

Conduct an interview with an employee : Are the employees given any tools to deal with stress management? Does the company have access to mental health counselors?

User Account

All Pages