Homework Help is Here – Start Your Trial Now!
Science
Chemistry
The CEO of 'Vale of Brazil' is considering buying a new mine. The mine is forecasted to start earning $5,250,000 of revenue four years from today. Due to a recession in mining industry, and lack of employed mining workers, the production of 'Vale of Brazil' is expecting to decrease by 10.5% p.a. (which have consequent impact on revenue.) Operating costs are 25% of the annual revenue. The mine is expected to be kept for four years, which will be sold for sale price of $4,550,000 at the end of last year. Setting up the mine will cost 1.5 mil today and 2mil in the first year and the year after. 55% of the 'Vale of Brazil' is financed through debt which has a cost of 7% and shareholders require a 3.5 percent premium on creditor's earning. - Q: What is the IRR and NPV?

The CEO of 'Vale of Brazil' is considering buying a new mine. The mine is forecasted to start earning $5,250,000 of revenue four years from today. Due to a recession in mining industry, and lack of employed mining workers, the production of 'Vale of Brazil' is expecting to decrease by 10.5% p.a. (which have consequent impact on revenue.) Operating costs are 25% of the annual revenue. The mine is expected to be kept for four years, which will be sold for sale price of $4,550,000 at the end of last year. Setting up the mine will cost 1.5 mil today and 2mil in the first year and the year after. 55% of the 'Vale of Brazil' is financed through debt which has a cost of 7% and shareholders require a 3.5 percent premium on creditor's earning. - Q: What is the IRR and NPV?

Chemistry
Chemistry
10th Edition
ISBN:9781305957404
Author:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste
Publisher:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste
Chapter1: Chemical Foundations
Section: Chapter Questions
Problem 1RQ: Define and explain the differences between the following terms. a. law and theory b. theory and...
See similar textbooks
icon
Related questions
Question
The CEO of 'Vale of Brazil' is considering buying a new mine. The mine is forecasted to start earning $5,250,000 of revenue four years from today. Due to a recession in mining industry, and lack of employed mining workers, the production of 'Vale of Brazil' is expecting to decrease by 10.5% p.a. (which have consequent impact on revenue.) Operating costs are 25% of the annual revenue. The mine is expected to be kept for four years, which will be sold for sale price of $4,550,000 at the end of last year. Setting up the mine will cost 1.5 mil today and 2mil in the first year and the year after. 55% of the 'Vale of Brazil' is financed through debt which has a cost of 7% and shareholders require a 3.5 percent premium on creditor's earning. - Q: What is the IRR and NPV?
Transcribed Image Text:The CEO of 'Vale of Brazil' is considering buying a new mine. The mine is forecasted to start earning $5,250,000 of revenue four years from today. Due to a recession in mining industry, and lack of employed mining workers, the production of 'Vale of Brazil' is expecting to decrease by 10.5% p.a. (which have consequent impact on revenue.) Operating costs are 25% of the annual revenue. The mine is expected to be kept for four years, which will be sold for sale price of $4,550,000 at the end of last year. Setting up the mine will cost 1.5 mil today and 2mil in the first year and the year after. 55% of the 'Vale of Brazil' is financed through debt which has a cost of 7% and shareholders require a 3.5 percent premium on creditor's earning. - Q: What is the IRR and NPV?
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Chemistry
Chemistry
Chemistry
ISBN:
9781305957404
Author:
Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste
Publisher:
Cengage Learning
Chemistry
Chemistry
Chemistry
ISBN:
9781259911156
Author:
Raymond Chang Dr., Jason Overby Professor
Publisher:
McGraw-Hill Education
Principles of Instrumental Analysis
Principles of Instrumental Analysis
Chemistry
ISBN:
9781305577213
Author:
Douglas A. Skoog, F. James Holler, Stanley R. Crouch
Publisher:
Cengage Learning
Organic Chemistry
Organic Chemistry
Chemistry
ISBN:
9780078021558
Author:
Janice Gorzynski Smith Dr.
Publisher:
McGraw-Hill Education
Chemistry: Principles and Reactions
Chemistry: Principles and Reactions
Chemistry
ISBN:
9781305079373
Author:
William L. Masterton, Cecile N. Hurley
Publisher:
Cengage Learning
Elementary Principles of Chemical Processes, Bind…
Elementary Principles of Chemical Processes, Bind…
Chemistry
ISBN:
9781118431221
Author:
Richard M. Felder, Ronald W. Rousseau, Lisa G. Bullard
Publisher:
WILEY
SEE MORE TEXTBOOKS