Question
In: Finance
What is the IRR for the gold mine? IRR % b. The Utah Mining...
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What is the IRR for the gold mine? |
| IRR | % |
| b. |
The Utah Mining Corporation requires a return of 9 percent on such undertakings. Should the mine be opened? |
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 $4,000,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $505,000 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 $560,000 at the end of Year 11.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to...
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 $905,000 to open and will
have an economic life of 11 years. It will generate a cash inflow
of $165,000 at the end of the first year, and the cash inflows are
projected to grow at 3 percent per year for the next 10 years.
After 11 years, the mine will...
The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to...
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 $2,600,000 to open and
will have an economic life of 11 years. It will generate a cash
inflow of $365,000 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...
The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to...
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 $2,700,000 to open and
will have an economic life of 11 years. It will generate a cash
inflow of $375,000 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...
Hickock Mining is evaluating when to open a gold mine. The mine has 60,000 ounces of gold left...
Hickock Mining is evaluating when to open a gold mine. The mine has 60,000 ounces of gold left that can be mined, and mining operations will produce 7,500ounces peryear. The required return on the gold mine is 12%, and it will cost $14million to open the mine. When the mine is opened, the company will sign a contract that willguarantee the price of gold for the remaining life of the mine. If the mine is opened today, each ounce of...
2. A mining company is evaluating when to open a gold mine. The mine has 80,000...
2. A mining company is evaluating when to open a gold mine. The
mine has 80,000 ounces of gold left that can be mined and mining
operations will produce 10,000 ounces per year. When the mine is
opened, the company will sign a contract that will guarantee the
price of gold for the remaining life of the mine. If the mine is
opened today, each ounce of gold will generate an after-tax cash
flow (= net or total cash flow)...
(5) A mining company is evaluating when to open a gold mine. The mine has 48,000...
(5) A mining company is evaluating when to open a gold mine.
The mine has 48,000 ounces of gold left and mining operations can
generate 6000 ounces/year.
The required rate of return is 12%
It will cost $34 million to open the mine.
When the company opens the mine, it will sign a contract
guaranteeing the price of gold for the remaining life of the
mine.
If the mine is opened today, each ounce of gold will generate an
after...
Hickock Mining is evaluating when to open a gold mine. The mine has 60,300 ounces of...
Hickock Mining is evaluating when to open a gold mine. The mine
has 60,300 ounces of gold left that can be mined, and mining
operations will produce 6,700 ounces per year. The required return
on the gold mine is 11 percent, and it will cost $34.7 million to
open the mine. When the mine is opened, the company will sign a
contract that will guarantee the price of gold for the remaining
life of the mine. If the mine is...
Hickock Mining is evaluating when to open a gold mine. The mine has 45,900 ounces of...
Hickock Mining is evaluating when to open a gold mine. The mine
has 45,900 ounces of gold left that can be mined, and mining
operations will produce 5,100 ounces per year. The required return
on the gold mine is 11 percent, and it will cost $33.1 million to
open the mine. When the mine is opened, the company will sign a
contract that will guarantee the price of gold for the remaining
life of the mine. If the mine is...
Flag Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in...
Flag Seth Bullock, the owner of Bullock Gold Mining, is
evaluating a new gold mine in South Dakota. Dan Dority, the
company's geologist, has just finished his analysis of the mine
site. He has estimated that the mine would be productive for eight
years, after which the gold would be completely mined. Dan has
taken an estimate of the gold deposits to Alma Garrett, the
company's financial officer. Alma has been asked by Seth to perform
an analysis of the...
Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South...
Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan Dority, the company's geologist, has just finished his analysis of the mine site. He has estimated that the mine would be productive for eight years, after which the gold would be completely mined. Dan has taken an estimate of the gold deposits to Alma Garrett, the company's financial officer. Alma has been asked by Seth to perform an analysis of the new mine...
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