USGOLD Company has an opportunity to invest in a gold mine. The initial investment is $$250$ million. Analysts estimate that the mine will produce $100,000$ ounces of gold per year for the next $10$ years. The extraction

cost of gold is $$150$ per ounce and is expected to remain at that level. The current price of gold is $$600$ per ounce and is expected to increase $4$ percent per year for the next $10$ years. What is the NPV of the project at a

discount rate of $10$ percent? $($Ignore taxes.$)$

Multiple Choice

$-$$$3\mathrm{.}8$ million

$$240\mathrm{.}8$ million

$$257\mathrm{.}8$ million

$$84\mathrm{.}9$ million