3. Seth Bullock the owner of bullock Gold Mining, is evaluating anew gold mine in south Dakota. Dan Dority, the company'sgeologist, has just finished his analysis of the mine site. He hasestimated that the mine would be productive for three years, afterwhich the gold would be completely mined. Dan has taken anestimate of the gold deposits to alma Garrett, the company'sfinancial officer. Alma has been asked by Seth to perform ananalysis of the new mine and present her recommendation onwhether the company should open the new mine.Alma has used the estimates provided by Dan to determine therevenues that could be expected from the mine. She also hasprojected the expense of opening the mine with two differentalternatives.A project cost 25000 is expects to generate cash flows are given asfollows @12% for both the projects.Year1 2 3 4 5Alternative 1 13000 8000 6000 8000 7000Alternative 28000 14000 5000 6500 4000PV factor 0.893 0.792 0.7120.6360.567Required:1. Compute the NPV of both alternative2. Suggest Seth Bullock which project is feasible to proceed with.

Name: 3. Seth Bullock the owner of bullock Gold Mining, is evaluating anew
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Description: 3. Seth Bullock the owner of bullock Gold Mining, is evaluating anew gold mine in south Dakota. Dan Dority, the company'sgeologist, has just finished his analysis of the mine site. He hasestimated that the mine would be productive for three years, a

The net present value is the method of finding the profitability of the project by adding up…

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A project cost 25000 is expects to generate cash flows are given as follows @12% for both the projects. Year 1 2 3 4 5 Alternative 1 13000 8000 6000 8000 7000 Alternative 28000 14000 5000 6500 4000 PV factor 0.893 0.792 0.7120.6360.567 Required: 1. Compute the NPV of both alternative 2. Suggest Seth Bullock which project is feasible to proceed with.

A project cost 25000 is expects to generate cash flows are given as follows @12% for both the projects. Year 1 2 3 4 5 Alternative 1 13000 8000 6000 8000 7000 Alternative 28000 14000 5000 6500 4000 PV factor 0.893 0.792 0.7120.6360.567 Required: 1. Compute the NPV of both alternative 2. Suggest Seth Bullock which project is feasible to proceed with.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 79DC

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