A mining company has already located an economically viable copper deposit and is re-assessing the after-tax cash flows and economics as they enter development. The project involves the costs and production characteristics summarized in the table below. Calculate the after-tax cash flow (ATCF) for this centure. Assume a 6-month deduction for all amortizable costs begins in the year such costs are incurred. Assume all equipment and infrastructure costs will be depreciated based on the MACRS 7-year schedule assuming the half-year convention. Start all depreciation at the end of year 1 when all assets are assumed to be in a condition or state of readiness and available for service. Assume a 3.0% royalty (tax) on the gross revenue for the mine each year. To simplify this analysis, write off all remaining book values against the assumed sale value of $2 billion at the end of year 4 and assume any gain will be taxes as ordinary income. Other income exists against which to use all deductions in teh year incurred. Assume a 35% Federal income tax rate and a 5.0% state income tax that is deductible for computing Federal taxable income. This project is in the United States and the investor is seeking a 15% after-tax minimum rate of return.

Note: Annual revenue is calculated on the net pounds of refined copper each year which is based on (annual tonnage) x (pounds per tonne) x (average grade) x (solvent extraction recovery rate). "M" represents millions and tonnes are metric measures with equvalent pounds per tonne summarized below.

Variation on Auxilary Problem 8-7A, M=1,000,000, t=Metric Tonne

Year	0	1	2	3	4
Production
Tonnes of Ore in M		10.00	17.00	17.00	17.00
Reserves @ Beginning
of Year in M	200.00	190.00	173.00	156.00	139.00
Pounds Per Tonne		2,204.62	2,204.62	2,204.62	2,204.62
Average Grade		0.015	0.015	0.015	0.015
Solvent Extraction
Recovery		0.990	0.990	0.990	0.990
Cu Price @ Per Pound		$2.00	$2.00	$2.00	$2.00
Operating Costs.
$ per Tonne of Ore		$16.00	$16.00	$16.00	$16.00
Project Sale Value in M$					$2,000.00
Capital Investment in M$
Mine Acquisition	50
Mine Development	250
Mine Equipment	900	400
Infrastructure	25	40
Working Capital	20	30

Calculate the after-tax cash flows (ATCF's) for the project and corresponding ROR and NPV.