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A coal mining company expects to receive $64,264,036 per year for the sale of its clean coal product. Opening the mine and processing facility will
A coal mining company expects to receive $64,264,036 per year for the sale of its clean coal product. Opening the mine and processing facility will require $179,846,677 in capital expense. Operating and maintenance costs are expected to require expenditures totaling $7,931,318 per year. The useful life of the mine is expected to be 10 years, and the corporate discount rate is 4%. Determine the NPV of the project without considering tax consequences. Compare that to the NPV determined assuming a composite tax rate of 39%. How much value (in terms of NPV) was lost by considering tax. Express your answer as a positive value and do not consider depreciation or depletion at this time
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