A Mining Company Plans to Mine a Beach for Zirconium

question 38

Multiple Choice

A mining company plans to mine a beach for zirconium sands. Doing so will cost $10 million up front and then produce cash flows of $3 million per year for five years. At the end of the sixth year the company will incur shut-down and clean-up costs of $2 million. If the cost of capital is 11%, then what is the MIRR for this project?

• A) 8.52%
• B) 11.03%
• C) 12.5%
• D) 10.92%

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Definitions:

Working Memory Span

The maximum number of items that individuals can keep in their working memory or immediate consciousness at any given moment.

Full Adult Level

Encompasses the stage of development where an individual possesses mature cognitive capabilities and has achieved their full mental growth.

Preoperational Stage

A developmental stage in early childhood (approximately 2 to 7 years old) characterized by symbolic thinking, egocentrism, and centration according to Jean Piaget's theory.

Major Developments

Major developments refer to significant advances or changes in a particular field or area, often marking progress or a new stage of growth.