Problem $12-16($Algo$)$ Net Present Value Analysls $[$LO$12-2]$

Windhoek Mines, Limited, of Namibla, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the

company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would

be assoclated with opening and operating a mine in the area:

$*$Recelpts from sales of ore, less out$-$of$-$pocket costs for salarles, utilltues, Insurance, and so forth.

The mineral deposit would be exhausted after four years of mining. At that point, the working capltal would be released for

relnvestment elsewhere. The company's required rate of return is $18\%.$

Click here to view Exhibit $12$B$-1$ and Exhiblt $12$B$-2,$ to determine the approprlate discount factoris$)$ using tables.

Required:

a$.$ What is the net present value of the proposed mining project?

b$.$ Should the project be accepted?

Complete this question by entering your answers in the tabs below.

What is the net present value of the proposed mining project? $($Enter negative amount with a minus sign. Round your final

answer to the nearest whole dollar amount.$)$

Net present value