What are the NPV and IRR of this project

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Question - After discovering a new gold vein in the Morono Mountains, BBC Mining Corporation must decide whether to mine the deposit. The most cost-effective method to mining gold is sulfuric acid extraction a process that results in environmental damage. To go ahead with the extraction BBC must spend $9000 for new mining equipment and pay $165000 for its installation. The gold mined will net the firm an estimated $350000 each year over the 5- year life of the vein. BBC's cost of capital is 17%. Assume that the cash inflows occur at the end of the year.

-What are the NPV and IRR of this project?

-Should the project be undertaken ignoring environmental concerns?

-How should environmental effects be considered when evaluating this, or any other, project? How might these effects change your decision in part b?

Reference no: EM133063430

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