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A 36.
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- A company is developing a special vehicle for Arctic exploration. The development requires an initial investment of $80,000 and investments of $50,000 and $40,000 for the next two years, respectively. Net returns beginning in Year 4 are expected to be $41,000 per year for 10 years. If the company requires a rate of return of 13%, compute the net present value of the project and determine whether the company should undertake the project. The net present value of the project is $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.)After some encouraging first signs, a mining company is evaluation setting up a gold mine in Western Australia. The mine will take 4 years to prepare and excavate, costing 4 payments of $15 million at the start of each year for the next four years, that is, at t=0, 1, 2 and 3. Once mining starts, the mine is expected to yield a constant $20 million for the next 12 years. The first payment is at t=4 and the last at t=15 The required return of the mine is 9% pa given as an effective annual nominal rate. All cash flows are real and the expected inflation rate is 2% pa given as an effective annual rate. Ignore taxes. The Net Present Value is: a. $72.44m b. $76.67m c. $89.16m d. $71.94m e. $84.32mThe Ball Shoe Company is considering an investment project that requires an initial investment of $532,000 and returns cash inflows of $79,275 per year for 10 years. The firm has a maximum acceptable payback period of 8 years. a. Determine the payback period for this project. b. Should the company accept the project?
- Southern Pole is developing a special vehicle for Antarcticexploration. The development requires investments of$100,000 today, $200,000 in 1 year from today and $300,000in 2 years from today. Net returns for the project areexpected to be $96,000 at the end of year over the next 15years. If the company requires a rate of return of 12%compounded annually-find the NPV of the projectAn international company intends to open a project to produce solar energy in Mosul for a period of 8 years, and the investment volume in the project is (1,800,000) dollars. The annual revenues are estimated at (400,000) dollars, and the annual costs are (9000) dollars. Calculate the project's internal rate of return, knowing that the minimum discount rate is (10%) and the highest discount (20%) and is the project accepted or rejected?The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, “This is a golden opportunity.” The mine will cost $750,000 to open and will have an economic life of 6 years. It will generate cash inflow of $175,000 at the end of the first year, and the cash inflows are projected to grow at 5 percent per year for the next 5 years. What is the IRR for the gold mine?
- Jasmine Manufacturing is considering a project that will require an initial investment of $52,000 and is expected to generate future cash flows of $10,000 for years 1 through 3, $8,000 for years 4 and 5, and $2,000 for years 6 through 10. What is the payback period for this project?Deep Drill Inc. is evaluating a project to produce a high-tech deep-sea oil exploration device. The investment required is $80 million for a plant with a capacity of 15,000 units a year for 5 years. The device will be sold for a price of $12,000 per unit. Sales are expected to be 12,000 units per year. The variable cost is $7,000 and fixed costs, excluding depreciation, are $25 million per year. Assume Deep Drill employs straight-line depreciation on all depreciable assets, and assume that they are taxed at a rate of 36%. If the required rate of return is 12%, what is the approximate NPV of the project?GeoSourcex is considering opening a new titanium mine. Once in operation, the mine is expected to produce positive net cash flows in perpetuity starting 3 years from now at $19.5 million per year but declining at a constant rate of 1.8% per year. The costs of getting the mine operational include an immediate payment of $110.0 million to purchase the land and acquire the mineral rights, plus other start -up costs of $10.0 million per year for three years starting in one year. If the project's cost of capital is 10.2% per year (compounded annually) what is the Net Present Value of this new mine?
- The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, “This is a golden opportunity.” The mine will cost $3,400,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $445,000 at the end of the first year, and the cash inflows are projected to grow at 8 percent per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $500,000 at the end of Year 11. a. What is the IRR for the gold mine? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. The Utah Mining Corporation requires a return of 8 percent on such undertakings. Should the mine be opened? multiple choice Yes NoSouthern Pole is developing a special vehicle for Antarctic exploration. The development requires investments of $100,000 today, $200,000 in 1 year from today and $300,000 in 2 years from today. Net returns for the project are expected to be $96,000 at the end of year over the next 15 years. If the company requires a rate of return of 12% compounded annually-find the NPV of the project. (Chapter 16.2)An Engineering Company is considering investing in a project. The estimated investment cost for this project amounts to Php 3,950,000. The projected maintenance costs and savings amount to Php 235,000 per year and Php 1,400,000 per year, respectively. The resale value of the project after the project's 10-year life is Php 2,350,000. If the firm’s MARR is 9% per year and we want to know the present worth of the project, write down the complete working formula (with substituted values) to solve the problem.
