A silver mine can yield 20,000 ounces of silver at a variable cost of $38 per ounce. The fixed costs of operating the mine are $50,000 per year. In half the years, silver can be sold for $54 per ounce; in the other years, silver can be sold for only $27 per ounce. Ignore taxes.

a.What is the average cash flow you will receive from the mine if it is always kept in operation and the silver always is sold in the year it is mined?(Do not round intermediate calculations.)

b.Now suppose you can costlessly shut down the mine in years of low silver prices. What happens to the average cash flow from the mine?(Do not round intermediate calculations.

An auto plant that costs $140 million to build can produce a line of flexfuel cars that will produce cash flows with a present value of $190 million if the line is successful but only $70 million if it is unsuccessful. You believe that the probability of success is only about 30%. You will learn whether the line is successful immediately after building the plant.

a.Calculate theexpected NPV.(Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Enter your answer in millions.)

Suppose that the plant can be sold for $120 million to another automaker if the auto line is not successful

b.Calculate the expected NPV.(Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Enter your answer in millions rounded to 1 decimal place.)

Quick Computing currently sells 9 million computer chips each year at a price of $11 per chip. It is about to introduce a new chip, and it forecasts annual sales of 27 million of these improved chips at a price of $14 each. However, demand for the old chip will decrease, and sales of the old chip are expected to fall to 2 million per year. The old chips cost $6 each to manufacture, and the new ones will cost $10 each. What is the proper cash flow to use to evaluate the present value of the introduction of the new chip?(Enter your answer in millions.)

Tubby Toys estimates that its new line of rubber ducks will generate sales of $6.90 million, operating costs of $3.90 million, and a depreciation expense of $0.90 million. If the tax rate is 30%, what is the firm's operating cash flow?(Enter your answer in millions rounded to 2 decimal places.)