Question: I need help to verify by calculating ROR and PVR analysis, thanks in advance. 444 A mineral property is producing at a rate that will
444 A mineral property is producing at a rate that will generate $5 milli in annual operating profit (revenue minus operating costs) during the annual end-of-year operating profit will remain constant at $5 million expected to be offset by sales escalation in future years, so that the production rate, mineral reserves will be depleted at the end of ten cach year until the mineral reserves are considered by incurring a $2 million equipment and development years from now. An increase in the annual production increasing mineral production to give a projected total operating proka year from now end of year one). These expansion costs would of $6 million at year one (cash flow of $2 million) and $8 million per year at years two through eight when reserves will be depleted below. Use NPV analysis to evaluate the economic desirability of the at the increased production rate. The alternatives are summarized expansion investments for a minimum ROR of 20%. Verify your NPV findings by making a valid ROR analysis and PVR analysis of these next year (assume end of year one). Escalation of now time zero) and a $4 million equipment and development OR, and Future mically Assuming a m better choice using ROR, Worth Profit. operating costs in depleted. At the currem rate is being co permin mutually exclusive alternatives. 5 5.... A) 0 1 2.... 5 5 8 9 9 5 10 -2 2 2 B) 8 8. .... 2.... 0 1 8. 9 10 444 A mineral property is producing at a rate that will generate $5 milli in annual operating profit (revenue minus operating costs) during the annual end-of-year operating profit will remain constant at $5 million expected to be offset by sales escalation in future years, so that the production rate, mineral reserves will be depleted at the end of ten cach year until the mineral reserves are years from now. An increase in the annual production considered by incurring a $2 million equipment and development increasing mineral production to give a projected total operating profa year from now (end of year one). These expansion costs would of $6 million at year one (cash flow of $2 million) and $8 million per year at years two through eight when reserves will be depleted below. Use NPV analysis to evaluate the economic desirability of the at the increased production rate. The alternatives are summarized expansion investments for a minimum ROR of 20%. Verify your NPV findings by making a valid ROR analysis and PVR analysis of these next year (assume end of year one). Escalation of now time zero) and a $4 million equipment and development OR, and Future mically Assuming a m better choice using ROR, Worth Profit. operating depleted. At the currem rate is being coa permit mutually exclusive alternatives. 5 5.... A) 0 1 2.... 5 5 5 8 9 5 10 -2 2 B) ..8 - 8. .... 2.... 0 1 8. 9 10 444 A mineral property is producing at a rate that will generate $5 milli in annual operating profit (revenue minus operating costs) during the annual end-of-year operating profit will remain constant at $5 million expected to be offset by sales escalation in future years, so that the production rate, mineral reserves will be depleted at the end of ten cach year until the mineral reserves are considered by incurring a $2 million equipment and development years from now. An increase in the annual production increasing mineral production to give a projected total operating proka year from now end of year one). These expansion costs would of $6 million at year one (cash flow of $2 million) and $8 million per year at years two through eight when reserves will be depleted below. Use NPV analysis to evaluate the economic desirability of the at the increased production rate. The alternatives are summarized expansion investments for a minimum ROR of 20%. Verify your NPV findings by making a valid ROR analysis and PVR analysis of these next year (assume end of year one). Escalation of now time zero) and a $4 million equipment and development OR, and Future mically Assuming a m better choice using ROR, Worth Profit. operating costs in depleted. At the currem rate is being co permin mutually exclusive alternatives. 5 5.... A) 0 1 2.... 5 5 8 9 9 5 10 -2 2 2 B) 8 8. .... 2.... 0 1 8. 9 10 444 A mineral property is producing at a rate that will generate $5 milli in annual operating profit (revenue minus operating costs) during the annual end-of-year operating profit will remain constant at $5 million expected to be offset by sales escalation in future years, so that the production rate, mineral reserves will be depleted at the end of ten cach year until the mineral reserves are years from now. An increase in the annual production considered by incurring a $2 million equipment and development increasing mineral production to give a projected total operating profa year from now (end of year one). These expansion costs would of $6 million at year one (cash flow of $2 million) and $8 million per year at years two through eight when reserves will be depleted below. Use NPV analysis to evaluate the economic desirability of the at the increased production rate. The alternatives are summarized expansion investments for a minimum ROR of 20%. Verify your NPV findings by making a valid ROR analysis and PVR analysis of these next year (assume end of year one). Escalation of now time zero) and a $4 million equipment and development OR, and Future mically Assuming a m better choice using ROR, Worth Profit. operating depleted. At the currem rate is being coa permit mutually exclusive alternatives. 5 5.... A) 0 1 2.... 5 5 5 8 9 5 10 -2 2 B) ..8 - 8. .... 2.... 0 1 8. 9 10
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