Question
Consider the following investment project. Opening a mine requires an initial investment of $120M. The mine will generate cash ow of $35M over the next
Consider the following investment project. Opening a mine requires an initial investment of $120M.
The mine will generate cash ow of $35M over the next 5 years. Once coal runs out in year 5, you
will have to pay remediation expense of $5M in years 6-10. The cost of capital is 8%. Would you
invest in this project? (The answer is 6.158M)
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Roberts, Hamdi Driss
8th Canadian Edition
01259270114, 9781259270116
