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You inherit rights to a gold mine for the next 5 years during which you plan to extract 7,000 ounces of gold every year. The
You inherit rights to a gold mine for the next 5 years during which you plan to extract 7,000 ounces of gold every year. The current price per ounce of gold is $900 and it is expected to stay at that level throughout the investment horizon. What is the present value of these rights? Assume all cashflows are received at the end of the year and the opportunity cost of capital is 10% pa.
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