Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
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 deposits to Alma Garrett, the company's financial officer. Alma has been asked by Seth to perform an analysis of the new mine and present her recommendation on whether the company should open the new mine. Alma has used the estimates provided by Dan to determine the revenues that could be expected from the mine. She has also projected the expense of opening the mine and the annual operating expenses. If the company opens the mine and the annual operating expenses. If the company opens the mine, it will cost $650 million today, and it will have a cash outflow of $72 million nine years from today in costs associated with closing the mine and reclaiming the area surrounding it. The expected cash flows each year from the mine are shown in the table. Bullock Mining has a 12 percent required return on all of its gold mines.
Year Cash flow
0 -$650,000,000
1 $80,000,000
2 $121,000,000
3 $162,000,000
4 $221,000,000
5 $210,000,000
6 $154,000,000
7 $108,000,000
8 $86,000,000
9 -$72,000,000
a. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present value of the proposed mine.
b. Based on your analysis should the company open the mine? Please explain your answer.
MLK, Inc. wants to issue new 15-year bonds for some much-needed expansion projects. The company currently has 6.5 percent coupon bonds on the market that sell for $975.00, make semi annual payments, and mature in 15 years. What coupon rate should the..
Western Airlines is considering a new route that will require adding an additional Boeing 777 to its fleet. Western can purchase the airplane for $225 million or lease it for $25 million per year. As a one-year decision, does purchasing or leasing th..
When the tests are combined, only one syringe, form, and sterile bandage will be used. Furthermore, only one charge for breakage/losseswill apply. Two blood vials are required, and reagent costs will remainthe same (reagents from all three tests ..
If a company can implement cash management systems and save three days by reducing remittance time and one day by increasing disbursement time based on $2,000,000 in average daily remittances and $2,500,000 in average daily disbursements and their re..
A company is expected to pay their first annual dividend three years from now. That payment will be $0.50 a share. Starting in year four, the company will increase the dividend by 4% per year. The required return is 12%. What is the estimated value o..
At the end of the growth phase the following financial ratio becomes more important to analyze
Define the three conditions that make up a perfect market, and then compare and contrast the effects of perfect markets and imperfect markets on value. Can they create or destroy value? Explain.
Heginbotham Corp. issued 20-year bonds two years ago at a coupon rate of 8.3 percent. The bonds make semi annual payments. If these bonds currently sell for 104 percent of par value, what is the YTM?
Laverne Industries stock has a beta of 1.42. The company just paid a dividend of $.92, and the dividends are expected to grow at 5.2 percent. The expected return of the market is 11.7 percent, and Treasury bills are yielding 5.2 percent. Calculate th..
It is well known that Investors generally do not like to bear risk. For two otherwise identical corporate bonds, the one with more idiosyncratic risk should have a price that is lower or the same?
The Owner of a small business borrowed $70,000 with an agreement to repay the loan with quarterly payment over a five year time period. If the interest rate is %12 per year compounded quarterly, his loan payment each quarter is nearest to:
What is the IFCs competitive advantage? To what extent does the IFC do something that is unique, valuable, and sustainable in mozal project?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd