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)12.5%
C)10.92%
D)11.03%

Question

Quizplus · Accepted Answer

The Answer of 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)12.5%
C)10.92%
D)11.03%

A Mining Company Plans to Mine a Beach for Zirconium