a. Draw a cash flow diagram for this copper mine operation. b. If the company can earn 12% per year on its capital, what is the future equivalent worth of the copper mine's cash flows at the end of year 7?
a. Draw a cash flow diagram for this copper mine operation. b. If the company can earn 12% per year on its capital, what is the future equivalent worth of the copper mine's cash flows at the end of year 7?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:3-15. It is estimated that a copper mine will pro-
duce 10,000 tons of ore during the coming year.
Production is expected to increase by 5% per
thereafter in each of the following 6 years.
year
Profit per ton will be $12 for years 1-7.
a. Draw a cash flow diagram for this copper
miņe operation.
b. If the company can earn 12% per year on its
capital, what is the future equivalent worth
of the copper mine's cash flows at the end
of year 7?
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