Use the Following Information to Answer the Question(s)below

question 34

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metals is considering opening a strip-mining operation to provide some of the raw materials needed in producing Rearden metal.The initial purchase of the land and the associated costs of opening up mining operations will cost $100 million today.The mine is expected to generate $16 million worth of ore per year for the next 12 years.At the end of the 12th year Rearden will need to spend $20 million to restore the land to its original pristine nature appearance.
-The number of potential IRRs that exist for Rearden's mining operation is equal to:

• A)0.
• B)1.
• C)2.
• D)12.

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Definitions:

Average Fixed Cost

The cost that remains constant per unit of output as total production increases or decreases.

Minimum Point

The lowest point on a curve, often related to economic graphs such as cost curves, indicating the least quantity of cost or effort.

Marginal Cost

The additional cost incurred from producing one more unit of a product or service.

Average Total Cost

The total cost of producing a given quantity of output divided by that quantity, representing the per unit cost of production.