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q3,andQ4 ,plz! Question 3 Dwarves, Inc. has opened a new mine to extract the elusive and 15 Marksl valuable mineral mithril. For the first year
q3,andQ4 ,plz!
Question 3 Dwarves, Inc. has opened a new mine to extract the elusive and 15 Marksl valuable mineral mithril. For the first year (-1), the Dwarves expects real cash flows of $38. Because the Dwarves will exhaust the mineral over time, it expects real cash flows to decrease at 2.5% per year in perpetuity. The real required return is 5% and the nominal required return is 10%. What is the value of the new mine? Question 4 An asset used in a five-year project has a net book value of $2,500 at the end of the project life (r-5). The acquisition cost of the machine is S10,000 at 1-0. If the expected market value of the asset is S5,000 at the end ofthe project, how much money does the company receive after selling the retired asset? The tax rate is 30%. 15 MarkslStep by Step Solution
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