Question
Gina used the estimates provided by Dory to determine the revenues that could be expectedfrom the mine. She has projected both the annual operating expenses
Gina used the estimates provided by Dory to determine the revenues that could be expectedfrom the mine. She has projected both the annual operating expenses of the new mine and the expense of opening the mine. If the company opens the mine, it will cost $635 million today, and it will have a cash outflow of $45 million nine years from today in costs associated with closing the mine and reclaiming the surrounding area.
The expected cash flows each year each year from the mine are shown below:
Year Cash Flow
-$635,000,000
189,000,000
105,000,000
130,000,000
173,000,000
205,000,000
155,000,000
145,000,000
122,000,000
- 45,000,000
How do I calculate:
payback period,
internal rate of return
modified internal rate of return
and net present value of the proposed mine.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started