I need help with the second problem in the document. I have no idea where to start.

11-H- VALUING A CCIIF'FEFI MINING PROJECT USING FCIIFt'Iu'nl'AFID PRICES Harrington Explorations Inc. is interested in expanding its copper mining operations in Indonesia. The area has long been noted for its rich deposits of copper ore. With oopper prices at near-record levels, the company is considering an investment of $51] million to open op- erations into a new vein of ore that was mapped by oompuanjtr geologists four years ago. The investment would he expensed [a combination of depreciation of capital equipment and depletion costs associated with using up the ore deposit]I over ve years toward a zero value. Because Harrington faces a corporate tax rate of 30%. the tax savings are signicant. The company's geologists also estimate that the ore will he ofahout the same purity.r as existing deposits, meaning that it will cost $15 to mine and process a ton of ore con- taining roughly 15% pure copper. The company estimates that there are 1511):} tons of ore in the new vein that can he mined and processed over the next ve years at a pace of 15,000 tons per year. Harrington's CFU asked one of his financial analysts to come up with an estimate of the expected value of the investment using the forward price curve for copper as a guide to the value of future copper production. The forward price curve for the price per Inn at cn-pper spanning the next ve years when the prepesed investment weuld be in prnductinn is as fellnws: mm lml'tmt 2|] I T H. I SWIM EDIE lml'tn EDI? ETJWM Ef $145Mm1 In a study cenln'tissinned by the CFO last year. the firms east of capital 1s-'as estimated tn be 9.5%. The risk-free rate nfinterest an ve-year Treasury hands is currently 55 'l'ia. 1:. Estimate the after-tax [certainty-equivalent} project free cash Flaws fur the project over its ve-year prn-ductiye life. It. Using the eertainty-equiyalent valuation methndnlngy, what is the l'~ll:"'tlF ef the pmjeet'? c. Assume new that the analyst estimates the ll'~ll:"'i'r at the prnject using the certainty- equiyalent rnethn-dnlngy and it is negative. 1|ill-"hen the rrn's CF13 sees the results of the analysis, he suggests that senlething must be wrong because his nwn analysis using cnnven tinnal methn-ds {i.e.. expected cash flaws and the rm's weighted aver- age east at capital} prnduces a pnsitive NPV 0f ninre than $450.11". Specically. he estimates that the price of crapper fer Elllti wnuld indeed be $10"! per ten but that this wnuld increase by 12% per year ever the ve-year life {if the pmject. Haw shnuld the analyst respnnd tn the CFI'J's ceneerns