Suppose that copper is being projected to be extracted from a certain mine at a rate...

Suppose that copper is being projected to be extracted from a certain mine at a rate given by

P'(t) = 330e^−0.07t

where P(t) is measured in tons of copper and t is measured in years.

(a) How many tons of copper is projected to be extracted during the second three year period? Give you answer to three decimal places.

(b) How many tons of copper is projected to be extracted during the sixth and seventh years? Give you answer to three decimal places.

Expert Solution

milcah answered 2 years ago

You own a copper mine. The price of copper is currently €1.50 per pound. The mine...

You own a copper mine. The price of copper is currently €1.50 per pound. The mine produces 1 million pounds of copper per year and costs €2 million per year to operate. It has enough copper to operate for 100 years. Shutting the mine down would entail bringing the land up to environmental standards and is expected to cost €5 million. Reopening the mine once it is shut down would be an impossibility given current environmental standards. The price of...

Suppose you are advising a firm that operates a copper mine that faces the following types...

Suppose you are advising a firm that operates a copper mine that faces the following types of risks. The firm is asking for your opinion to buy or sell derivatives contracts to hedge its underlying operations or financial risk. For each risk type listed below, recommend a call or put option for the firm. Briefly justify your reasoning. A. Exposure to interest rates if the firm is planning to borrow $20 million 12 months from today. B.Exposure to an upcoming...

Demand for copper from the Red Dog mine is steady over time, at p = 1000...

Demand for copper from the Red Dog mine is steady over time, at p = 1000 - q for both this year and next year (where p is the price in dollars per ton and q is the number of tons). Your marginal cost of mining and marketing copper is constant at $100 per ton, and your discount rate is r = 0.05. You can price like a monopolist but your available supply is only S = 600 tons that...

Assume you have a limited stock of copper in a mine of 30 units. You want...

Assume you have a limited stock of copper in a mine of 30 units. You want to know how many units to extract this year (Q1) and how many to extract next year (Q2). The slope of the marginal benefit curve is: MB: y = -0.4Q + 12 and the slope of the marginal cost curve is: MC: y = 4 Use the formula PV(MB1 - MC1) = PV(MB2 - MC2) to calculate how many units of copper to extract...

Copper Explorations recently acquired the rights to mine a new site. Equipment and a truck were...

Copper Explorations recently acquired the rights to mine a new site. Equipment and a truck were purchased to begin mining operations at the site. Details of the mining assets follow: Asset Date of Purchase Cost Est. Residual Est. Life Mineral rights Mar. 1/20 $ 96,000 $ 0 4 yrs Equipment Mar. 1/20 283,800 0 4 yrs Truck Mar. 1/20 134,400 0 4 yrs Copper's year-end is December 31 and it uses the straight-line method for all mining assets including intangibles....

On January 1st, 2019, ABC Inc. purchased a copper mine for $400,000. The company is required...

On January 1st, 2019, ABC Inc. purchased a copper mine for $400,000. The company is required by provincial law to restore the land on which the mine is located to its initial condition at the end of the mine's ten year useful life. Restoration costs are estimated to be $35,000. ABC is subject to an interest rate of 5%. ABC Inc uses straight line deprecation and follows IFRS. Required Prepare the journal entries required on January 1st and December 31st,...

Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,650,000 in...

Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,650,000 in 2021 for the mining site and spent an additional $730,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs: (FV of...

Suppose that a the normal rate of infection for a certain disease in cattle is 25%....

Suppose that a the normal rate of infection for a certain disease in cattle is 25%. To test a new serum which may prevent infection, three experiments are carried out. The test for infection is not always valid for some particular cattle, so the experimental results are “inconclusive” to some degree–we cannot always tell whether a cow is infected or not. The results of the three experiments are (a) 10 animals are injected; all 10 remain free from infection. (b)...

Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,250,000 in 2021...

Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,250,000 in 2021 for the mining site and spent an additional $650,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs: (FV of $1,...

Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,250,000 in 2018...

Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,250,000 in 2018 for the mining site and spent an additional $650,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately 4 years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs: (FV of $1,...

Question