Ch 11-End-of-Chapter Problems-The Basics of Capital Budgeting 1. The environmental effects of not mitigated could result in additional loss of cash flows and/or fines and penalties due to ill will among customers, community, etc. Therefore, even though the mine is legal without mitigation, the company needs to make sure that they have anticipated all costs in the "no mitigation analysis from not doing the environmental mitigation. 1. The environmental effects should be ignored since the mine is legal without mitigation. III. The environmental effects should be treated as a sunk cost and therefore ignored IV. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the mine is legal without mitigation, there are no benefits to performing a "no mitigation analysis. V. The environmental effects should be treated as a remate possibility and should only be considered at the time in which they actually occur Select c. Should this project be undertaken? Select If so, should the fim do the mitigation? 1. Under the assumption that all costs have been considered, the company would not mitigate for the environmental impact of the project since its IRR without mitigation is greater than its IRR when mitigation costs are included in the analysis. -=E2> II. Under the assumption that all costs have been considered the company would mitigate for the environmental impact of the project since its NPV with mitigation is greater than its NPV when mitigation costs are not included in the analys III. Under the assumption that all costs have been considered the company would not mitigate for the environmental impact of the project since its NFV without mitigation is greater than its NPV when mitigation costs are included in the analysi Sent IV. Under the son that all casts have beendered, the company would mitigate for the environmental impact of the project since its IRR with mitigation in greater than when mitigation not included in the V. Under the assumption that all costs have been considered the company would not mitigate for the environmental impact of the project since its NPV with mitigation is greater than its NPV when mitigation costs are not included in the Grade it Now Save & Continue Continue without saving

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Ch 11-End-of-Chapter Problems-The Basics of Capital Budgeting 1. The environmental effects of not mitigated could result in additional loss of cash flows and/or fines and penalties due to ill will among customers, community, etc. Therefore, even though the mine is legal without mitigation, the company needs to make sur