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After discovering a new gold vein in the Colorado Mountains CTC 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, 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 over the 5-year life of the vein. CTC'S cost of capital is 14 percent. For the purposes of this problem, assume that the cash inflows occur at the end of the year.
a. What are the NPV and IRR of this project?
b. Should this project be undertaken, ignoring environmental concerns?
c. How should environmental effects be considered when evaluating this, or any other, project? How might these effects change your decision in part b?
The firm's equity has a beta of 1.5, and the expected market return is 15%. The tax rate is 30% and the WACC is 15%. What is the risk-free rate?
A common stock issue is currently selling for $31 per share. You expect the next dividend to be $1.40 per share. If the firm has a dividend growth rate of 5% that is expected to remain constant indefinitely, what is the firm's cost of equity?
suppose the us dollar and euro interest rate for the next one year are 1.5 and 2 respectively. both are annually
Harold's Hardware has total assets of $773,000 and total debt of $189,000. What is the equity multiplier?
Compute Wynn Memorial Nursing homes acid
The U.S. Treasury bill is currently selling at a discount basis of 4.25%. The par value of the bill is $100,000, and will mature in ninety days. What is the price of this Treasury bill?
How much in dividends were paid to shareholders during the year? Assume that all dividends declared were actually paid.
1. the target capital structure for qm industries is 36 percent common stock 7 percent preferred stock and 57 percent
Using Rhodes Corporation's financial statements (shown below), answer the following questions. What is the net operating profit after taxes (NOPAT) for 2010?
You have been asked to develop a financial analysis of two projects and based on Net Present Value (NPV), Return on Investment (ROI), and Profitability Index (PI), Briefly explain the following concepts and their use/value in assessing the validi..
What will be the annual net savings? Assume that the T-bill rate is 2.4 percent annually.
a year ago melissa purchased 50 shares of common stock for 20 per share. during the year value of her stock decreased
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