You are getting ready to start a new project that will incur some cleanup and shutdown costs when it is completed. The project costs $5.31 million up front and is expected to generate $1.16 million per year for 10 years and then have some shutdown costs at the end of year 11. Use the MIRR approach to find the maximum shutdown costs you could incur and still meet your cost of capital of 14.9% on this project. The maximum shutdown costs allowable to still have a positive NPV is $ (Round to the nearest dollar.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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You are getting ready to start a new project that will incur some cleanup and shutdown costs when it is completed. The project costs $5.31 million up front and is expected
to generate $1.16 million per year for 10 years and then have some shutdown costs at the end of year 11. Use the MIRR approach to find the maximum shutdown costs
you could incur and still meet your cost of capital of 14.9% on this project.
The maximum shutdown costs allowable to still have a positive NPV is $
(Round to the nearest dollar.)
Transcribed Image Text:You are getting ready to start a new project that will incur some cleanup and shutdown costs when it is completed. The project costs $5.31 million up front and is expected to generate $1.16 million per year for 10 years and then have some shutdown costs at the end of year 11. Use the MIRR approach to find the maximum shutdown costs you could incur and still meet your cost of capital of 14.9% on this project. The maximum shutdown costs allowable to still have a positive NPV is $ (Round to the nearest dollar.)
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