A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $1,000 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. Developing the mine (without mitigation) would require an initial outlay of $63
million, and the expected cash inflows would be $21 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $22 million. The risk
-
adjusted WACC is
1
4
%
.
a
.
Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer
of $
1
0
,
5
5
0
,
0
0
0
should be entered as
1
0
.
5
5

.
Do not round intermediate calculations. Round your answers
to two decimal places.
NPV: $
million
IRR:
%
Calculate the NPV and IRR without mitigation. Enter your answer for NPV in millions. For example, an
answer of $
1
0
,
5
5
0
,
0
0
0
should be entered as
1
0
.
5
5

.
Do not round intermediate calculations. Round your
answers to two decimal places.
NPV: $
million
IRR:
%