ompany has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash e associated with opening and operating a mine in the area: Cost of new equipment and timbers Working capital required Annual net cash receipts Cost to construct new roads in three years Salvage value of equipment in four years $ 420,000 $ 140,000 $ 155,000* $ 48,000 $ 73,000 Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. he mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released f einvestment elsewhere. The company's required rate of return is 19%. lick here to view Exhibit 7B-1 and Exhibit 7B-2; to determine the appropriate discount factor(s) using tables. equired: . What is the net present value of the proposed mining project? Should the project be accepted?
ompany has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash e associated with opening and operating a mine in the area: Cost of new equipment and timbers Working capital required Annual net cash receipts Cost to construct new roads in three years Salvage value of equipment in four years $ 420,000 $ 140,000 $ 155,000* $ 48,000 $ 73,000 Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. he mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released f einvestment elsewhere. The company's required rate of return is 19%. lick here to view Exhibit 7B-1 and Exhibit 7B-2; to determine the appropriate discount factor(s) using tables. equired: . What is the net present value of the proposed mining project? Should the project be accepted?
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
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