Reference no: EM132764721
Question: Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area:
Cost of new equipment and timbers $410,000 Working capital required $210,000 Annual net cash receipts$145,000
Cost to construct new roads in year three $62,000 Salvage value of equipment in four years $87,000
Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth.
The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 18%.
Required: a. What is the net present value of the proposed mining project?
b. Should the project be accepted?
|
Explain why kroger has only one reportable segment
: Explain why Kroger has only one reportable segment? What items are included in operating, general and administrative expenses (OG&A) and where are they reported
|
|
How much income is allocated to purple
: Green, Black and Blue each own one third of Color partnership. Each has a zero outside basis in their partnership interest. Color is a cash basis service.
|
|
What is the size of the monthly payment
: Bob and Angelique Mackenzie bought a property valued at $84,000 for $15,000 down with the balance amortized over 20 years. The terms of the mortgage require.
|
|
What parts of contract are separate performance obligations
: Assume that Pfizer, a large research-based pharmaceutical company, enters into a contract with a start-up biotechnology company called HealthPro and promises.
|
|
What is the net present value of the proposed mining project
: Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights.
|
|
Explain why companies hedge foreign risks
: Explain why companies hedge foreign risks. Describe the situations where hedge accounting be used to account for a foreign currency option used to hedge a.
|
|
What are the characteristics of monopolistic competition
: What are the characteristics of monopolistic competition? What are the Differences between homogeneous and differentiated oligopolies?
|
|
Discuss the impact of sarbanes-oxley
: Discuss the impact of Sarbanes-Oxley on a company's internal controls. Be sure to define internal controls and discuss the basic principles for assessing.
|
|
Did the initial investment include a payment for goodwill
: On January 1, 2020, Exile Company bought 40,000 shares of the available 200,000 voting common shares of Davis Corporation, a publicly traded firm.
|