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(a) A mining company is planning a new project that will run from 2021 to 2031. The project will incur capital costs of $150
(a) A mining company is planning a new project that will run from 2021 to 2031. The project will incur capital costs of $150 Million dollars in 2021. From 2021 to 2025 it will produce 3,000 tonnes of copper at a cost of $3 million dollars in operating expenses per year. From 2026 to 2030 annual production increases to 4,500 tonnes of copper but will cost $3.5 million dollars in operating expenses per year. No copper will be produced in 2031, but closure costs are estimated at $100 Million dollars. Assume that: 0 The copper price is $9000 per tonne O The company's discount rate is 12% (starting in 2022). Taxes and inflation can be ignored. i. Calculate the Net Present Value using the accompanying spreadsheet
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