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New Life Metal Recycling and Salvage has just been given the opportunity to salvage scrap metal and other materials from an old industrial site. The
New Life Metal Recycling and Salvage has just been given the opportunity to salvage scrap metal and other materials from an old industrial site. The current owners of the site will sign over the site to New Life at no cost. New Life intends to extract scrap metal at the site for 24 months, and then will clean up the site. return the land to useable condition. and sell it to a developer: Projected costs associated with the project follow: Fixed Variable Months 124 Metal extraction and processing $4.000 per month $ 100 per ton Months 12? Rent on temporary buildings $2.000 per month Administration $ 5.000 per month Months 252? Cleanup $30,000 per month Land restoration $436,000 total Cost of selling land $ 150,000 total Ignore time value of money Required 1. Assuming that New Life expects to salvage 50,000 tons of metal from the site. what is the total project life cycle cost? 2. Suppose New Life can sell the metal for $ 150 per ton and wants to earn a prot {before taxes} of $40 per ton. At what price must New Life sell the land at the end of the project to achieve its target prot per ton
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