continue P 2-14

Danson management estimates that 3,500 tonnes of scrap can be recovered and sold for $300 per tonne. Projected costs are: Fixed Variable Scrap metal extraction $60,000 per year $110 per tonne Equipment lease $48,000 per year Administration $96,000 per year Land restoration $50,000 in final month Required: Assume all cash flows occur at the end of each applicable year, unless otherwise noted. Recommend whether Danson should proceed with the project. Note any assumptions needed