What is the expected value for Rhodes Mine? Round to the nearest dollar. No commas. What is the standard deviation of Rhodes mine? Round to the nearest dollar. No commas. What is the coefficient of variation of Rhodes mine? Round to 2 decimal places
Pinkerton Mining Company is analyzing the purchase of two silver mines. Both projects are 5 years.
The cost of capital is 10%.
The Rhodes Mine will cost $12,000 and the anticipated after tax cash flows are projected as follows:
|
YEARLY AFTER TAX CASH FLOW |
|
|
|
|
|
$3,200 |
.05 |
|
3,000 |
.2 |
|
4,000 |
.3 |
|
5,000 |
.3 |
|
6,000 |
.15 |
The Denis Mine will cost $14,500 and the anticipated after tax cash flows are projected as follows:
|
YEARLY AFTER TAX CASH FLOW |
PROBABILITY |
|
|
|
|
$3,000 |
.1 |
|
2,700 |
.5 |
|
5,000 |
.2 |
|
6,000 |
.2 |
|
|
|
What is the
What is the standard deviation of Rhodes mine? Round to the nearest dollar. No commas.
What is the coefficient of variation of Rhodes mine? Round to 2 decimal places.
What is the NPV of Rhodes mine? Round to the nearest dollar. No commas.
What is the expected value of Denis mine? Round to the nearest dollar. No commas.
What is the standard deviation of Denis mine? Round to the nearest dollar. No commas.
What is the coefficient of variation of Denis mine? Round to 2 decimal places.
What is the NPV of Denis mine? Round to the nearest dollar. No commas.
What is mine should have their discount rate adjusted for risk? Type Rhodes or Denis.
Which of following industries would help reduce their risk exposure.
Consumer Products (CP) -0.20
Materials (M) -0.50
Industrials (I) +0.30
Type Cp or M or I as your answer.
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