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 $14 million up front and then produce cash flows of $7 million per year for five years. At the end of the sixth year the company will incur shut-down and clean-up costs of $6 million. If the cost of capital is 13.0%, then what is the MIRR for this project?

A) -60.97%
B) -78.39%
C) -87.10%
D) -95.81%