Exhibit 3 shows the cash flow expectations of this investment. Using the top portion, with the price @ $80 per ton, do you think the increased cash flows add a significant amount to the already strong balance sheet positions shown in Exhibit 1? Is the increase risk worth this? Rationalize your answer in the best fashion that you can.

913-548-8- 2015 2016 2017 2018 2019 20 201 2022 2023 2024 225 2026 207 2028 2029 Total 1 Revenue 2 mil lion tons o $80 1600 160,0 1600 1600 1600 160O 160O 160O 1600 1600 16001600 1601600 160,0 2400.0 288 28.8 288 304 304 304 336 336 336 34 384 384 384 34 38.4 508.8 Smelting, refining, and freightcosts Operating profits 4 832 .2 2 81.6 81.6 81.6 784 78,4 784 736 736 736 736 736 73,6 1,171.2 120 12.0 12.0 2.0 12012012.0 12.0 12.0 12.0 120 120 120 12.0 12.0180.0 712 71.2 712 96 696 6 64 664 64 616 616 616 616 616 616 991.2 24.9 24.9 24.9 244 24.4 244 232 232 23.2 216 21.6 21.6 21.6 21.6 21.6 346.9 463 463 463 %2 %2 %2 432 432 43,2 40,0 40,0 40,0 40,0 40,0 40,0 644,3 58.3 58.3 50,3 572 572 572 %2552 552 520 520 520 520 520 52.0 821.3 Tanes @ 35% Neticome Return of workingcapital 00 0.00000000000000 0 O O 00 20.0 58.3 58.3 sa.3 572 572 57.2 ss,2 5s2 sa 520 520 520 520 520 72.0 844.3 2 Revenue 2 mil lion tons $100 Mining costs 4 Smelting refining, and freightcosts 480 48.0 18.0 18.010180 18.0 48.0 8.0 18.O 10 180 18.0 8.0 48.0720.0 1232 1232 1232 1216 1216 1216 1184 1184 1184 1136 1136 1136 1136 1136 1136 1,7712 120 12.0 120 120 120 120 120 120 120 120 120 120 120 20 12.0 180.0 111.2 111.2 1112 1096 1096 106 1064 106 1064 1016 1016 1016 1016 1016 101.6 1,5912 389 38.9 389 384 384 34 372 372 37.2 356 356 356 356 356 35. 556.9 72.3 72.3 723 71.2 71.2 71.2 m2 69.2 09.2 ee.o ee.o ee.o ee.o .0 66.0 1,034.3 843 84.3 8L3 2 2 2 81.2 81.2 81.2 780 787878780 78,0 1,214.3 Operating proits Taxes @ 35% Netincome 1 Return of workingcapital 2 Total cash flows 00 0.0 0 0 00 00 00 0 00 0 0 0 0 0020.0 84.3 81.3 84.3 2 2 2 81.2 81.2 81.2 780 780 780 780 98.0 1,234.3 ing costs were assumed to go up in steps. During the first half o te mining operations, coss were expected to be reatively kow as a lrge portion of the iron ore was covered with litteover burden. More expensive mining woukl not be necessary until the later years of mine operation the original $200 million investment in capital for the pncject, S2) million was budgeted for warking ca pital 913-548-8- 2015 2016 2017 2018 2019 20 201 2022 2023 2024 225 2026 207 2028 2029 Total 1 Revenue 2 mil lion tons o $80 1600 160,0 1600 1600 1600 160O 160O 160O 1600 1600 16001600 1601600 160,0 2400.0 288 28.8 288 304 304 304 336 336 336 34 384 384 384 34 38.4 508.8 Smelting, refining, and freightcosts Operating profits 4 832 .2 2 81.6 81.6 81.6 784 78,4 784 736 736 736 736 736 73,6 1,171.2 120 12.0 12.0 2.0 12012012.0 12.0 12.0 12.0 120 120 120 12.0 12.0180.0 712 71.2 712 96 696 6 64 664 64 616 616 616 616 616 616 991.2 24.9 24.9 24.9 244 24.4 244 232 232 23.2 216 21.6 21.6 21.6 21.6 21.6 346.9 463 463 463 %2 %2 %2 432 432 43,2 40,0 40,0 40,0 40,0 40,0 40,0 644,3 58.3 58.3 50,3 572 572 572 %2552 552 520 520 520 520 520 52.0 821.3 Tanes @ 35% Neticome Return of workingcapital 00 0.00000000000000 0 O O 00 20.0 58.3 58.3 sa.3 572 572 57.2 ss,2 5s2 sa 520 520 520 520 520 72.0 844.3 2 Revenue 2 mil lion tons $100 Mining costs 4 Smelting refining, and freightcosts 480 48.0 18.0 18.010180 18.0 48.0 8.0 18.O 10 180 18.0 8.0 48.0720.0 1232 1232 1232 1216 1216 1216 1184 1184 1184 1136 1136 1136 1136 1136 1136 1,7712 120 12.0 120 120 120 120 120 120 120 120 120 120 120 20 12.0 180.0 111.2 111.2 1112 1096 1096 106 1064 106 1064 1016 1016 1016 1016 1016 101.6 1,5912 389 38.9 389 384 384 34 372 372 37.2 356 356 356 356 356 35. 556.9 72.3 72.3 723 71.2 71.2 71.2 m2 69.2 09.2 ee.o ee.o ee.o ee.o .0 66.0 1,034.3 843 84.3 8L3 2 2 2 81.2 81.2 81.2 780 787878780 78,0 1,214.3 Operating proits Taxes @ 35% Netincome 1 Return of workingcapital 2 Total cash flows 00 0.0 0 0 00 00 00 0 00 0 0 0 0 0020.0 84.3 81.3 84.3 2 2 2 81.2 81.2 81.2 780 780 780 780 98.0 1,234.3 ing costs were assumed to go up in steps. During the first half o te mining operations, coss were expected to be reatively kow as a lrge portion of the iron ore was covered with litteover burden. More expensive mining woukl not be necessary until the later years of mine operation the original $200 million investment in capital for the pncject, S2) million was budgeted for warking ca pital