Question
In: Accounting
After discovering a new gold vein in the Colorado mountains, CTC Mining Corporation must decide whether...
After discovering a new gold vein in the Colorado mountains, CTC Mining Corporation must decide whether to go ahead and develop the deposit. The most cost-effective method of mining gold is sulfuric acid extraction, a process that could result in environmental damage. Before proceeding with the extraction, CTC must spend $900,000 for new mining equipment and pay $165,000 for its installation. The mined gold will net the firm an estimated $350,000 each year for the 5-year life of the vein. CTC's cost of capital is 13%. For the purposes of this problem, assume that the cash inflows occur at the end of the year.
What is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest dollar. Use a minus sign to enter negative value, if any.
What is the project's IRR? Do not round intermediate calculations. Round your answer to two decimal places.
Should this project be undertaken if environmental impacts were not a consideration?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
After discovering a new gold vein in the Colorado Mountains, CTC Mining Corp must decide whether...
After discovering a new gold vein in the Colorado Mountains, CTC
Mining Corp must decide whether to go ahead and develop the
deposit. The most cost-effective method of mining gold is sulfuric
acid extraction, a process that could result in environmental
damage. Before proceeding with the extraction, CTC must spend
$900,500 for new mining equipment and pay $175,000 for its
installation. The gold mined will net the firm an estimated
$345,000 each year for the 5-year life of the vein....
(10-12) After discovering a new gold vein in the Colorado mountains, CTC Mining Corporation must decide...
(10-12) After discovering a new gold vein in the Colorado
mountains, CTC Mining Corporation
must decide whether to go ahead and develop the deposit. The
most cost-effective method of
mining gold is sulfuric acid extraction, a process that could
result in environmental damage.
Before proceeding with the extraction, CTC must spend $900,000
for new mining equipment
and pay $165,000 for its installation. The gold mined will net
the firm an estimated $350,000
each year for the 5-year life of the...
After discovering a new gold vein in the Kilimambogo Mountains, ABC Mining Corporation must decide whether...
After discovering a new gold vein in the Kilimambogo Mountains,
ABC Mining Corporation must decide whether to mine the deposit. The
most cost-effective method of mining gold is sulfuric acid
extraction, a process that results in environmental damage. To go
ahead with the extraction, ABC must spend Shs.9, 000,000 for new
mining equipment and pay Shs.1,650,000 for its installation.The
gold mined will net the firm an estimated Shs.4, 000,000 each year
over the 5-year life of the vein. ABC’s cost...
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Bullock Gold Mining Seth Bullock, the owner of Bullock Gold
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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
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BULLOCK GOLD MINING Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold...
BULLOCK GOLD MINING
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...
Bullock Gold Mining Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold...
Bullock Gold Mining 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...
Bullock Gold Mining Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold...
Bullock Gold Mining 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...
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Flag Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in...
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evaluating a new gold mine in South Dakota. Dan Dority, the
company's geologist, has just finished his analysis of the mine
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