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!
Dick Davies owns a small mining company called Davies Gold Mining. The recent rises in the gold price has made the business attractive and generated significant cash reserves for the company. Mr Davies has been evaluating an opportunity to mine a new find in Tanzania. Barry Koch, the company's senior geologist has completed a survey of the mine and has taken his results to the CFO of the company, Andy Marshall, who will analyse the predictions and form an opinion as to whether the investment is worth the risk.
Andy has used the estimates of the mine's yield combined with estimated operating costs to create a projected net income for each of the 8 years of the mine's expected life. Initial development costs will be $500 million and there will be a final expense of $80 million to clean up the mine site when the seam is exhausted. Andy's estimates are summarized in the table below. Davies Gold Mining has a 12% required return on its business activities. All figures are in millions of dollars.
t0
-500
t1
60
t2
90
t3
170
t4
230
t5
205
t6
140
t7
110
t8
70
t9
-80
1. Calculate the payback period , Internal Rate of Return and NPV of the proposed mine. (Use of a spreadsheet program is recommended.)
2. Based on these numbers, would you recommend that the company goes ahead?
3. How confident are you in your predictions?
4. What risks does the project face that may not be included in your calculations?
Make the calculations necessary to arrive at the correct figures for total contribution margin, contribution margin per unit, the contribution margin ration, and profit (or loss) with calculations.
What is the NPV at a discount rate of 10 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
If an investor bought 2 XYZ Feb 60 call at 2 and Sells 2 XYZ Feb 70 calls at 1. What's the gain or loss on the contracts at a market of 75? What type of strategy is the investor using?
Zymase is a biotechnology start-up company. Research at Zymase must choose one of three different research strategies. The payoffs & their likelihood for every strategy are given below.
Using the corporate valuation model approach, what should be the company's stock price today?
1.catola shoes an athletic shoe and clothing manufacturer is considering a move into the fashion clothing business
firm a is considering the use of a lock-box system. the firms average check receipt is 150. the company invests excess
Do you think that the explanatory notes, supplementary schedule, Management's Discussion and Analysis, 10-K filing, Auditor's report and Proxy statements provide more data for financial analysis.
you have been asked by your 56 year old auntmary to help her assess a new venture. it is friday night and she needs the
Build It Better Products has come out with a new and improved product. As a result, the firm projects an ROE of 18%, and it will maintain a plowback ratio of 0.40. It's earnings this year will be $2 per share. Investors expect a 12% rate of return..
what are the ethical considerations in not submitting what the actual results show?in general is doing what the boss
There is a 5 percent probability of a boom and a 75 percent chance of a normal economy. What is your expected rate of return on this stock?
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