How can you salvage the irr rule-what is the decision

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Reference no: EM131966510

Mine Corp. is considering opening a new mine. The mine will cost $100 million initially. Once opened, it will generate $80 million for the next 3 years. You expect new environmental regulations to be introduced in Year 6 after opening the mine. At that time, you will have to do a cleanup that will cost $150 million. You estimate the cost of capital to be 10%.

• What issue will you run into if you do an IRR analysis?

• How can you salvage the IRR rule? What’s the decision?

How do you calculate the MIRR by hand without an excel calculator?

Reference no: EM131966510

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