4. A mineral reserve containing 500,000 tons of lead ore is to be developed with expected production of 15,000 tons per year increasing 7% per year through year 10 by a corporate investor. The estimated net smelter return value of the ore is $100 per ton in year one and is expected to increase $8 per ton in each following year. Royalties are 9% of gross income. A one-time mine development cost of $1,400,000 is to be included at time zero. Expense 70% of the mine development cost at time zero and capitalize the remaining 30% to be amortized over 60 months with a 6-month (6/60) amortization deduction at times zero. A mineral rights acquisition cost of $950,000 also will be incurred at time zero (the basis for the cost depletion calculations) along with equipment of $1,800,000 dollars to be depreciated using MACRS depreciations beginning at year one, for a 7-year life with a half year one convention. $1,500,000 will be invested in working capital at year zero for in process inventories, product inventories and accounts receivable. Assume all assets, including inventories, will be liquidated at the end of year 10 for sale value of $1,200,000. Operating cost is $750,000 in year one, escalating 15% per year in the following years. Other income and tax obligation to do not exist with which to use negative taxable income, so losses must be carried forward to make project economics stand Determine the project cash flows for year 0 through 10, assuming 21% effective income tax rate, and calculate the project after-tax DCFROR and NPV for I*equals 12%. (65 pts)