A Mining Company Plans to Mine a Beach for Rutile

Multiple Choice

A mining company plans to mine a beach for rutile.To do 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 NPV for this project?

A) -$99,212
B) $12,304
C) $18,409
D) $82,416
E) $111,389