A Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploita mineral deposit on and to which them engineering and cost analysis has been made, and it is expected that the following cash flows would be sociated with soeningen 1 2 3 Cost of equipment required and timbers $500,000 PV Factor 1/10 VUI THU H | | | | | 4 Working capital investment required $125,000 5 Annual net cash inflows $195,000 -R(arrayals estimate) Rural) 6 Cost to construct new roads in three years $56,000 7 Salvage value of equipment in four years $81,000 =PMTrate,nper.pvallfvall type) 8 Company's required rate of return 22% -NPV rate,arrayvals) 9 10 11 *Receipts from sales of ore, less out of pocket costs for salaries, utilities, insurance, etc. 12 23 The mineral deposit will be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. 4 should be indicated by a min s Required: a. Determine the net present value of the proposed mining projectenore income taxes. (12 marks) (Anych out the 5 may not need to use all the highlighted cells. Year 28 29 30 b. What is the internal rate of return of the project? 31 32 Internal rate of return 33 34 c. Assume there are some intangible benefits associated with the equipment. To make this an acceptable project, how much would the annual intangible s benefits have to be? 5 Intangible benefits per year