Texts: Bohrer Mining, Inc., is trying to evaluate a project with the following cash flows: Year Cash Flow 0 -$39,400,000 1 $63,400,000 2 -$12,400,000 a-1. What is the NPV for the project if the company requires a return of 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2. Should the firm accept this project? b) This project has 2 IRR - final answers only!!!!!
Added by Lisa W.
Step 1
For Year 0: PV0 = -$39,400,000 / (1 + 0.10)^0 = -$39,400,000 For Year 1: PV1 = $63,400,000 / (1 + 0.10)^1 = $57,636,364.36 For Year 2: PV2 = -$12,400,000 / (1 + 0.10)^2 = -$10,826,446.28 Show more…
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