Does mirr lead to the same accept

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A mining company is deciding whether to open a strip mine, which costs $1.5 million. Cash inflows of $14 million would occur at the end of Year 1. The land must be returned to its natural state at a cost of $11 million, payable at the end of Year 2.

  1. Should the project be accepted if WACC = 10%?
  2. Should the project be accepted if WACC = 20%?
  3. What is the project's MIRR at WACC = 10%? Round your answer to two decimal places. Do not round your intermediate calculations.
  4. What is the project's MIRR at WACC = 20%? Round your answer to two decimal places.

Does MIRR lead to the same accept/reject decision for this project as the NPV method?

Yes or No?

Does the MIRR method always lead to the same accept/reject decision as NPV? (Hint: Consider mutually exclusive projects that differ in size.)

Yes or No?

Reference no: EM132392764

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