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You own a coal mining company and are considering opening a new mine. The mine will cost $115.8 million to open. If this money is spent imr the site must be cleaned and maintained at environmental standards. The cleaning and maintenance are expected to cost $1.9 million per yea cost of capital is 7.6%, what does the NPV rule say? Use the graph below to determine the IRR(s) in the problem. NPV of the Investment in the Coal Mine oo 14 NPV (5 millions) 10 15 20 -16- Discount Rate (9) What does the IRR rule say about whether you should accept this opportunity? (Select the best choice below.) O A. Accept the opportunity because the IRR is greater than the cost of capital e. The mine will cost $115.8 million to open. If this money is spent immediately, the mine will generate $20.5 million for the next 10 years. After that, the coal will run out and e cleaning and maintenance are expected to cost $1.9 milion per year in perpetuity What does the IRR rule say about whether you should accept this opportunity? If the opportunity? (Select the best choice below) he cost of capital Who We way about whether you should accept the opportunity (Hotect the best choice below) OA Accept the opportunity because the IRR is greater than the cost of capital O a. There are two R, to you cannot the IR as a chorion for accepting the opportunity OG Reject the opportunity because the IRR is lower than the 70% cost of capital OD. The IRR is 10.715,0 cpt the opportunity The NPV using the cost of capital of 70% e 8 milion (Round to three decimal places) The post of wie Pyan a function of we discount este sa rahaped. Historiects the reanis atre 2014 and r= 10.71% What does the NPV nude say? (Select the best choice below) OA the oponunity cool of cities than = 2.31%, the investment should be undertakan OB Reject the project because the DV is negative O the opportunity cost of captis between 231% and 10.71%, the investment should be undertaken O the opportunity cost of capital is greater than r= 10.71%, the investment should be undertaken

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