After discovering a gold vein in the Colorado Mountains, CTC Mining Corporation must decide to go ahead and develop the deposit. The most cost effective method of mining gold is the sulfuric acid extraction, a process that could result in environmental damage.

To begin mining CTC must spend $900,000 for new mining equipment and pay $165,000 for its installation. The mining operation will net the firm an estimated $350,000 per year and the vein is expected to last for five years. CTCs cost of capital is 14%. Assume that the cash flows occur at the end of each year.

a. Calculate in Excel, What is the projects NPV, IRR, & PB?