$(25$ pts$)$ A copper mining project has an expected mine life of $15$ years, and will require

development costs of $$400$ million at time zero, $$300$ million at the end of year $1,$ and $$250$ million

at the end of $2$ years from time zero. The project is expected to produce $35,000$ tons of copper

starting in year $3,$ and production will increase by $8\%$ of the previous years production for the next

$6$ years $($years $4-9)$ then remain the same level for the life of the mine, i$.$e$.$ years $10-15.$ There is $$25$

Million salvage value at the end of the project and there is a reclamation obligation of $$85$ million,

both occur at the end of year $15.$ All cash flows are assumed at the end of the period. Using todays

spot copper price of $$\frac{3\mathrm{.}78}{l}b.$ and a mill recovery factor of $94\mathrm{.}5\%$;

Create an Excel spreadsheet and show your work.

a$.$ What is the undiscounted total net cash flow for the project?

b$.$ Calculate the rate of return for this project.

c$.$ Calculate the NPV for the project if the Cost of Capital $=15\%$

d$.$ Using the "What If $-$ Goal Seek" analysis in Excel, or trial and error what would the

copper price be to generate a NPV $=$$$0,$ at a hurdle rate of $15\%?$

e$.$ Using the "What If $-$ Goal Seek" analysis in Excel, or trial and error, what does the price

of copper have to be to generate a $25\%$ ROR?