Your Company Is Planning to Open a New Gold Mine

question 42

Multiple Choice

Your company is planning to open a new gold mine which will cost $3 million to build,with the expenditure occurring at the end of the year three years from today.The mine will bring year-end after-tax cash inflows of $2 million at the end of the two succeeding years,and then it will cost $.5 million to close down the mine at the end of the 3rd year of operation.What is the project's IRR?

• A) 14.36%
• B) 10.17%
• C) 17.42%
• D) 12.70%
• E) 21.53%

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