The end of the project life might lead to multiple IRRs

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Reference no: EM131878845

The Ulmer Uranium Company is deciding whether or not to open a strip mine whose net cost is $4.4 million. Net cash inflows are expected to be $27.7 million, all coming at the end of Year 1. The land must be returned to its natural state at a cost of $25 million, payable at the end of Year 2.

Can you think of some other capital budgeting situations in which negative cash flows during or at the end of the project's life might lead to multiple IRRs?

What is the project's MIRR at r = 6%?

What is the project's MIRR at r = 12%?

Calculate the two projects' NPVs. Round your answers to the nearest cent. Enter your answers in dollars. For ex: 1.2 million should be entered as 1,200,000.

Project 1 $

Project 2 $

Reference no: EM131878845

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