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A coal mining company expects to receive $ 6 4 , 6 0 5 , 9 6 6 per year for the sale of its
A coal mining company expects to receive $ per year for the sale of its clean coal product. Opening the mine and processing facility will require $ in capital expense. Operating and maintenance costs are expected to require expenditures totaling $ per year. The useful life of the mine is expected to be years, and the corporate discount rate is The mine and processing equipment have no salvage value. The composite tax rate is In addition to the economic information, the total deposit includes million tons of coal which will be mined at tons per year. The mineral rights for this deposit originally cost $ million. The depletion rate is What is the NPV of this project considering tax consequences with depreciation and depletion? Assume that the full capital cost can be depreciated over years using the straight line method. Note: the year costs should include both the $ capital expense AND the $ million mineral rights costs.
A coal mining company expects to receive $ per year for the sale of its clean coal product. Opening the mine and processing facility will require $ in capital expense. Operating and maintenance costs are expected to require expenditures totaling $ per year. The useful life of the mine is expected to be years, and the corporate discount rate is The mine and processing equipment have no salvage value. The composite tax rate is In addition to the economic information, the total deposit includes million tons of coal which will be mined at tons per year. The mineral rights for this deposit originally cost $ million. The depletion rate is What is the NPV of this project considering tax consequences with depreciation and depletion? Assume that the full capital cost can be depreciated over years using the straight line method.
Note: the year costs should include both the $ capital expense AND the $ million mineral rights costs.
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