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Hickock Mining is evaluating when to open a gold mine. The mine has 34,000 ounces of gold left that can be mined, and mining operations will produce 6,800 ounces per year. The required return on the gold mine is 10 percent, and it will cost $34.8 million to open the mine. When the mine is opened, the company will sign a contract that will guarantee the price of gold for the remaining life of the mine. If the mine is opened today, each ounce of gold will generate an after tax cash flow of $1,480 per ounce. If the company waits one year, there is a 55 percent probability that the contract price will generate an after tax cash flow of $1,680 per ounce and a 45 percent probability that the after tax cash flow will be $1,380 per ounce.
What is the value of the option to wait?
You bought a stock four months ago for $74.32 per share. The stock paid no dividends. The current share price is $76.84. What is the APR and EAR of your investment? (Do not round intermediate calculations. Enter your answers as a percentage rounded t..
A pure discount (or zero-coupon) government bond is issued today that promises to pay $10,000 in 5 years. If the current interest rate on similar bonds is 6%, what is the price of the bond? Recall that the compounding interval for bonds is 6 months.
Analyse the value of Caraway's equity if it pays out a $200,000 cash dividend today and plans to pay a $1.2 million liquidating dividend at the end of one year.
discuss two of the biggest challenges facing financial managers today. one of the articles should be about the
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What is the present value of the following set of cash flows at an interest rate of 6%; $100 now, $600 three years from now, $500 five years from now, and $300 ten years from now.
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Now suppose we add a riskless asset to the investment possibilities. What effects will this have on the construction of portfolios
Calculate the NPV if you sell the old machine and buy new machine A. (Round up to the nearest dollar amount. DO NOT use $, commas, or decimal points) (Example $23,345.50 is entered as 23346)
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