Project has positive npv at company

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A mining company wishes to start up a new small gold mine. The initial cost will be $5m and it is expected to extract $3m a year in gold with incurring only $1.5m a year in costs for 5 years. Asssume revenue and costs are received and incurrred at the end of each year, starting in one year's time. When the last revenue is received and costs paid in 5 years time, the mine also incurs a shutdown expense of $1m. The project has a positive NPV at the company's 10.25% cost of capital. Which of the following is closest to the correct IRR? Ignore taxes.

Reference no: EM131554746

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