4.A company must spend $900,500 for new mining equipment and pay $250,000 for its installation. The gold mined will net the firm an estimated $345,000 each year for the 5-year life of the vein. CTC’s cost of capital is 14%. For the purposes of this problem, assume that the cash inflows occur at the end of the year.
- What are the project’s NPV and IRR?
- Should this project be undertaken if environmental impacts were not a consideration?
- How should environmental effects be considered, or any other, project?