Discuss the triggering function

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Question: Ruined Mound Properties is in final negotiations for the rights to mine copper on a tract of land in Indonesia. They must decide about adding an option in their agreement with the government of Indonesia. This option would allow them to develop an identical adjacent tract of land, beginning no later than 4 years after they break ground on the original development. By that time, they will have 4 years of experience with a number of variables in their model of the performance of the original development, the key variables being the volume of ore on the tract of land, the yield of the ore (pounds of copper in a ton of ore), the price per pound of copper, and the cost per ton of processing the ore. Suggest some good possibilities for a triggering function for the exercise of the option to develop the second tract of land.

Reference no: EM131524384

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