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Black Lung Mining is considering opening a new coal mine. Black Lung’s beta is 0.8. Black Lung paid $15 million for the property six years ago. A recently completed feasibility study estimated that new machinery and equipment at the mine will cost $33 million, working capital requirements will increase by $500,000 immediately, and employee-training expenses will be $125,000. The feasibility study cost $1,000,000. What amount should Black Lung use as its initial outlay in the capital budgeting analysis

Black Lung Mining is considering opening a new coal mine. Black Lung’s beta is 0.8. Black Lung paid $15 million for the property six years ago. A recently completed feasibility study estimated that new machinery and equipment at the mine will cost $33 million, working capital requirements will increase by $500,000 immediately, and employee-training expenses will be $125,000. The feasibility study cost $1,000,000. What amount should Black Lung use as its initial outlay in the capital budgeting analysis

Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter11: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 1P: Talbot Industries is considering launching a new product. The new manufacturing equipment will cost...
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Black Lung Mining is considering opening a new coal mine. Black Lung’s beta is 0.8.
Black Lung paid $15 million for the property six years ago. A recently completed
feasibility study estimated that new machinery and equipment at the mine will cost $33
million, working capital requirements will increase by $500,000 immediately, and
employee-training expenses will be $125,000. The feasibility study cost $1,000,000.
What amount should Black Lung use as its initial outlay in the capital budgeting
analysis?

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