Business, 10.08.2021 01:00 betsylancer8522

Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area: Cost of new equipment and timbers $500,000
Working capital required $180,000
Annual net cash receipts $195,000*
Cost to construct new roads in three years $56,000
Salvage value of equipment in four years $81,000

The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 22%.

Required:
Determine the Net present value of the proposed mining project.

Answers: 2

Show answers

Other questions on the subject: Business

Business, 22.06.2019 14:20, kevinglvz

Anew 2-lane road is needed in a part of town that is growing. at some point the road will need 4 lanes to handle the anticipated traffic. if the city's optimistic estimate of growth is used, the expansion will be needed in 4 years and has a probability of happening of 40%. for the most likely and pessimistic estimates, the expansion will be needed in 8 and 15 years respectively. the probability of the pessimistic estimate happening is 20%. the expansion will cost $ 4.2 million and the interest rate is 8%. what is the expected pw the expansion will cost?

Answers: 1

continue

Business, 22.06.2019 22:00, ethanw8973

Which of the following is a function performed by market prices? a. market prices communicate information to buyers and sellers. b. market prices coordinate the decisions of buyers and sellers. c. market prices motivate entrepreneurs to produce those products that are currently most desired relative to their costs of production. d. all of the above are functions performed by market prices.

Answers: 2

continue

Business, 23.06.2019 10:40, smileyjesse6073

Command is: a. the ability to control information exchange within and across organizations involved in an incident. b. assumed by the individual who is the highest-ranking person on the scene regardless of experience or training level. c. based on the number of individuals or resources that one supervisor can manage effectively during an incident. d. directing, ordering, or controlling by virtue of explicit statutory, regulatory, or delegated authority.

Answers: 1

continue

Business, 23.06.2019 11:00, maguilarz2005

What are the factors that affects on the process of planning

Answers: 3

continue

You know the right answer?

Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral de...