Parkville Mining is considering opening a new self sustaining gold mine at a cost today of $1,000,000. Beginning one year from today, this mine will produce $100,000 worth of gold every year for 10 years. After that, the value of gold produced will be $50,000 forever. If Parkville Mining 's appropriate interest rate is 8%, then the NPV of this gold mine is closest to: Group of answer choices $2,592,016 None of these alternatives $921,008 -$39,496 $1,296,008
Parkville Mining is considering opening a new self sustaining gold mine at a cost today of $1,000,000. Beginning one year from today, this mine will produce $100,000 worth of gold every year for 10 years. After that, the value of gold produced will be $50,000 forever. If Parkville Mining 's appropriate interest rate is 8%, then the NPV of this gold mine is closest to: Group of answer choices $2,592,016 None of these alternatives $921,008 -$39,496 $1,296,008
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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Parkville Mining is considering opening a new self sustaining gold mine at a cost today of $1,000,000. Beginning one year from today, this mine will produce $100,000 worth of gold every year for 10 years. After that, the value of gold produced will be $50,000 forever. If Parkville Mining 's appropriate interest rate is 8%, then the NPV of this gold mine is closest to:
Group of answer choices
$2,592,016
None of these alternatives
$921,008
-$39,496
$1,296,008
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