Questions
An electric utility is considering a new power plant in northern Arizona. Power from the plant...

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $210.08 million, and the expected cash inflows would be $70 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $75.06 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 16%.

  1. Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. 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 $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places.
    NPV: $   million
    IRR:   %

  2. How should the environmental effects be dealt with when evaluating this project?
    1. The environmental effects should be ignored since the plant is legal without mitigation.
    2. The environmental effects should be treated as a sunk cost and therefore ignored.
    3. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.
    4. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.
    5. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.

    -Select-IIIIIIIVVItem 5
  3. Should this project be undertaken?
    1. The project should be undertaken only under the "mitigation" assumption.
    2. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.
    3. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.
    4. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.
    5. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.

In: Finance

CAPITAL BUDGETING CRITERIA: ETHICAL CONSIDERATIONS An electric utility is considering a new power plant in northern...

CAPITAL BUDGETING CRITERIA: ETHICAL CONSIDERATIONS

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $269.75 million, and the expected cash inflows would be $90 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $94.16 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 18%.

  1. Calculate the NPV and IRR with mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
    NPV $   million
    IRR  %

    Calculate the NPV and IRR without mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55.
    NPV $   million
    IRR  %

  2. How should the environmental effects be dealt with when evaluating this project?
    1. The environmental effects should be ignored since the plant is legal without mitigation.
    2. The environmental effects should be treated as a sunk cost and therefore ignored.
    3. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.
    4. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.
    5. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.

    -Select-IIIIIIIVVItem 5
  3. Should this project be undertaken?
    1. The project should be undertaken only under the "mitigation" assumption.
    2. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.
    3. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.
    4. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.
    5. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.

    -Select-IIIIIIIVVItem

In: Finance

An electric utility is considering a new power plant in northern Arizona. Power from the plant...

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $210.55 million, and the expected cash inflows would be $70 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $76.27 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 19%.

  1. Calculate the NPV and IRR with mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
    NPV $   million
    IRR  %

    Calculate the NPV and IRR without mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55.
    NPV $   million
    IRR  %

  2. How should the environmental effects be dealt with when evaluating this project?
    1. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.
    2. The environmental effects should be ignored since the plant is legal without mitigation.
    3. The environmental effects should be treated as a sunk cost and therefore ignored.
    4. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.
    5. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.

  3. Should this project be undertaken?
    1. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.
    2. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.
    3. The project should be undertaken only under the "mitigation" assumption.
    4. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.
    5. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.

In: Finance

An electric utility is considering a new power plant in northern Arizona. Power from the plant...

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $240.73 million, and the expected cash inflows would be $80 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $84.66 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 19%. ****please use financial calculator to solve****

  1. Calculate the NPV and IRR with mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
    NPV $   million
    IRR   %

    Calculate the NPV and IRR without mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55.
    NPV $   million
    IRR   %

  2. How should the environmental effects be dealt with when evaluating this project?
    1. The environmental effects should be treated as a sunk cost and therefore ignored.
    2. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.
    3. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.
    4. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.
    5. The environmental effects should be ignored since the plant is legal without mitigation.

    -Select-IIIIIIIVVItem 5
  3. Should this project be undertaken?
    1. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.
    2. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.
    3. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.
    4. The project should be undertaken only under the "mitigation" assumption.
    5. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.

    -Select-IIIIIIIVVItem 6

In: Finance

CAPITAL BUDGETING CRITERIA: ETHICAL CONSIDERATIONS An electric utility is considering a new power plant in northern...

CAPITAL BUDGETING CRITERIA: ETHICAL CONSIDERATIONS

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $210.08 million, and the expected cash inflows would be $70 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $76.13 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 17%.

  1. Calculate the NPV and IRR with mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
    NPV $   million
    IRR  %

    Calculate the NPV and IRR without mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55.
    NPV $   million
    IRR  %

  2. How should the environmental effects be dealt with when evaluating this project?
    1. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.
    2. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.
    3. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.
    4. The environmental effects should be ignored since the plant is legal without mitigation.
    5. The environmental effects should be treated as a sunk cost and therefore ignored.

    -Select- the best choice
  3. Should this project be undertaken?
    1. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.
    2. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.
    3. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.
    4. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.
    5. The project should be undertaken only under the "mitigation" assumption.

    -Select- the best choice

In: Finance

CAPITAL BUDGETING CRITERIA: ETHICAL CONSIDERATIONS An electric utility is considering a new power plant in northern...

CAPITAL BUDGETING CRITERIA: ETHICAL CONSIDERATIONS

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $210.55 million, and the expected cash inflows would be $70 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $75.35 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 17%.

  1. Calculate the NPV and IRR with mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
    NPV $   million
    IRR %

    Calculate the NPV and IRR without mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55.
    NPV $   million
    IRR %

  2. How should the environmental effects be dealt with when evaluating this project?
    1. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.
    2. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.
    3. The environmental effects should be ignored since the plant is legal without mitigation.
    4. The environmental effects should be treated as a sunk cost and therefore ignored.
    5. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.

    -Select-IIIIIIIVV
  3. Should this project be undertaken?
    1. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.
    2. The project should be undertaken only under the "mitigation" assumption.
    3. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.
    4. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.
    5. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.

    -Select-IIIIIIIVV

In: Finance

An electric utility is considering a new power plant in northern Arizona. Power from the plant...

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $210.64 million, and the expected cash inflows would be $70 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $76.08 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 19%.

  1. Calculate the NPV and IRR with mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
    NPV $   million
    IRR   %

    Calculate the NPV and IRR without mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55.
    NPV $   million
    IRR   %

  2. How should the environmental effects be dealt with when evaluating this project?
    1. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.
    2. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.
    3. The environmental effects should be ignored since the plant is legal without mitigation.
    4. The environmental effects should be treated as a sunk cost and therefore ignored.
    5. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.

    -Select-IIIIIIIVVItem 5
  3. Should this project be undertaken?
    1. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.
    2. The project should be undertaken only under the "mitigation" assumption.
    3. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.
    4. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.
    5. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.

In: Finance

Château Beaune is a family-owned winery located in the Burgundy region of France, headed by Gerard...

Château Beaune is a family-owned winery located in the Burgundy region of France, headed by Gerard Despinoy. The harvesting season in early fall is the busiest time of the year for the winery, and many part-time workers are hired to help pick and process grapes. Despinoy is investigating the purchase of a harvesting machine that would significantly reduce the amount of labour required in the picking process. The harvesting machine is built to straddle grapevines, which are laid out in low-lying rows. Two workers are carried on the machine just above ground level, one on each side of the vine. As the machine slowly crawls through the vineyard, the workers cut bunches of grapes from the vines, and the grapes fall into a hopper. The machine separates the grapes from the stems and other woody debris. The debris is then pulverized and spread behind the machine as a rich ground mulch. Despinoy has gathered the following information relating to the decision of whether to purchase the machine (the French currency is the euro, denoted by €):
a.

The winery would save €190,000 per year in labour costs with the new harvesting machine. In addition, the company would no longer have to purchase and spread ground mulch—at an annual savings of €10,000.
b.

The harvesting machine would cost €480,000. It would have an estimated 12-year useful life and zero salvage value. The winery uses straight-line depreciation.
c.

Annual out-of-pocket costs associated with the harvesting machine would be insurance, €1,000; fuel, €9,000; and a maintenance contract, €12,000. In addition, two operators would be hired and trained for the machine, and they would be paid a total of €70,000 per year, including all benefits.
d. Despinoy feels that the investment in the harvesting machine should earn at least a 16% rate of return.

  

Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) using tables.

   

Required:
(Ignore income taxes.)
1.

Determine the annual net savings in cash operating costs that would be realized if the harvesting machine were purchased.

       

2.

Compute the SRR expected from the harvesting machine. (Hint: This is a cost reduction project.) (Round your answer to 1 decimal place (i.e., 0.123 should be considered as 12.3%).)

     

3-a. Compute the payback period on the harvesting machine. (Round your answer to 1 decimal place.)

      

         

3-b.

Despinoy will not purchase equipment unless it has a payback period of five years or less. Under this criterion, should the harvesting machine be purchased?
Yes
No
4-a.

Compute (to the nearest whole percent) the IRR promised by the harvesting machine. (Round discount factor(s) to 3 decimal place and final answer to the nearest whole number (i.e., 0.123 should be considered as 12%).)

         

4-b.

On the basis of this computation, does it appear that the SRR is an accurate guide in investment decisions?
Yes
No

In: Accounting

An electric utility is considering a new power plant in northern Arizona. Power from the plant...

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $240.41 million, and the expected cash inflows would be $80 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $84.88 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 16%.

  1. Calculate the NPV and IRR with mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
    NPV $   million
    IRR  %

    Calculate the NPV and IRR without mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. Do not round your intermediate calculations. For example, an answer of $10,550,000 should be entered as 10.55.
    NPV $   million
    IRR  %

  2. How should the environmental effects be dealt with when evaluating this project?
    1. The environmental effects should be ignored since the plant is legal without mitigation.
    2. The environmental effects should be treated as a sunk cost and therefore ignored.
    3. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.
    4. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.
    5. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.
  3. Should this project be undertaken?
    1. The project should be undertaken only under the "mitigation" assumption.
    2. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.
    3. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.
    4. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.
    5. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.

In: Finance

An electric utility is considering a new power plant in northern Arizona. Power from the plant...

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $270.22 million, and the expected cash inflows would be $90 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $93.42 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 16%.

  1. Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. 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 $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places.
    NPV: $   million
    IRR:   %

  2. How should the environmental effects be dealt with when evaluating this project?
    1. The environmental effects should be treated as a sunk cost and therefore ignored.
    2. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.
    3. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.
    4. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.
    5. The environmental effects should be ignored since the plant is legal without mitigation.
  3. Should this project be undertaken?
    1. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.
    2. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.
    3. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.
    4. The project should be undertaken only under the "mitigation" assumption.
    5. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.

In: Finance