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Can you help with the red boxed question, it got me confused! This is what I have got from the first part of the question

image text in transcribedCan you help with the red boxed question, it got me confused!

This is what I have got from the first part of the question

image text in transcribedimage text in transcribedCan you PLEASE help and give some explanation.Also, try to demonstrate in excel if possible.

Thank you!

Consider a mining and processing project for an oil tar sands project. From the data given below, calculate the after-tax cash flows for a 30-year life of the project and the NPV for an MARR of 15% Initial capital expenditures totaled $415.5 million and were distributed over four years (10% in year 0,30% in year 1, 40% in year 2, and 20% in year 3). Beginning in year 4: 17.666 million tons of ore will be mined per year -Bitumen production rate will be 7.347 million barrels per year -Product yield will be 0841 barrels of oil per barrel of bitumen -Product selling price will be $80 per bamel -Operating costs: $10.47 per barrel of bitumen for plant and upgrading costs $9.02 per ton of ore for mining costs -10-year straight-line depreciation -4% tax rate (state and federal) After completing the analyses determine the sensitivity of a possible reduced selling price of the product on the profitability (rate of return) of the project. Perform this analyses in 10% increments until the project does not produce a rate of return that meets the MARR. At each increment of reduction in selling price what production increase will be required to maintain the profit margin achieved at $80 per barrel. Place your sensitivity analyses on a separate tab from the NPV analyses of your excel file. Include graphics/excel charts to summarize your analyses and conclusions Consider a mining and processing project for an oil tar sands project. From the data given below, calculate the after-tax cash flows for a 30-year life of the project and the NPV for an MARR of 15% Initial capital expenditures totaled $415.5 million and were distributed over four years (10% in year 0,30% in year 1, 40% in year 2, and 20% in year 3). Beginning in year 4: 17.666 million tons of ore will be mined per year -Bitumen production rate will be 7.347 million barrels per year -Product yield will be 0841 barrels of oil per barrel of bitumen -Product selling price will be $80 per bamel -Operating costs: $10.47 per barrel of bitumen for plant and upgrading costs $9.02 per ton of ore for mining costs -10-year straight-line depreciation -4% tax rate (state and federal) After completing the analyses determine the sensitivity of a possible reduced selling price of the product on the profitability (rate of return) of the project. Perform this analyses in 10% increments until the project does not produce a rate of return that meets the MARR. At each increment of reduction in selling price what production increase will be required to maintain the profit margin achieved at $80 per barrel. Place your sensitivity analyses on a separate tab from the NPV analyses of your excel file. Include graphics/excel charts to summarize your analyses and conclusions

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