Multiple IRRs. Strip Mining, Inc., can develop a new mine III an initial cost of$5 million. The mine will provide a cash flow of$30 million in I year. The land then must be reclaimed at a cost of $28 million in the second year.
a. What are the IRRs of this project?
b. Should the firm develop the mine if the discount rate is 10 percent\'! 20 percent\'! 350 percent? 400 percent?
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