Business
Business, 07.05.2021 21:00, ayoismeisjuam

"Deep Mining and Precious Metals are separate firms that are both considering a silver exploration project. Deep Mining is in the actual mining business and has an after-tax cost of capital of 12.8%. Precious Metals is in the precious gem retail business and has an after-tax cost of capital of 10.6%. The two firms have the same capital structure. The project under consideration has initial costs of $575,000 and anticipated annual cash inflows of $102,000 a year for ten years. Which firm(s), if either, should accept this project?"

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