Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

A company want you to use rate of return analysis to evaluate the economics of buying the mineral rights to a mineral reserve for a cost of $1,500,000 at year 0 with the expectation that mineral development costs of $5M and tangible equipment costs of $4M will be spent at year 1. The mineral reserves are estimated to be produced uniformly over 8 year production life (evaluation years 2 through 9). Since escalation of operating costs each year is estimated to be off-set by escalation of revenues, it is projected that profit will be constant at $4M per year in each of evaluation years 2 through 9. find out the project rate of return, then assume a 15% minimum rate of return and find out the project growth rate of return, NPV and PVR.

The answers are NPV = +7.99; PVR = 0.86, but I need to know how to get the answers, its a self study.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M937478

Have any Question? 


Related Questions in Microeconomics

1 black-scholes pde show that the black-scholes price for a

1. Black-Scholes PDE: Show that the Black-Scholes price for a European Put with strike K and expiration T P(t; S t ) = Ke -r(T- t) Φ(-d 2 (T - t, S t )) - S t Φ(-d 1 (T - t, S t )), where d 1 (T - t, S t ) = (log{S t /K} ...

Assignment key concepts of economicswrite a three to four

Assignment: Key Concepts of Economics Write a three to four page paper in which you: 1. Identify at least four key points of a relevant economic article from either the Strayer Library or a newspaper. The article must de ...

Discussion questionon the surface hinduism appears

Discussion Question On the surface, Hinduism appears radically different from Abrahamic religions like Islam and Judaism. However, Hindu teachings state that there is a single divine essence in the universe. Consider too ...

From the scenario for katrinas candiessuggest one1method in

From the scenario for Katrina's Candies,suggest one(1)method in which Herb could use a cost-benefit analysis to argue for or against an expansion. Create three optimal decision rules for Katrina's Candies(e.g.,whether to ...

Demonstrate how metrics such as valuation economic profit

Demonstrate how metrics such as valuation, economic profit, and related terms are measured and evaluated. Explain the significance and implications of various economic theories pertaining to profit, consumer choice, dema ...

Assignmentevery one is different so too are project

Assignment Every one is different, so too are project managers. Each has their own style and personality. The 'human' traits of a project manager are most apparent during the monitoring and controlling phase of the proje ...

Balance of payments and foreign exchange rates

Balance of Payments and Foreign Exchange Rates Assignment This assignment examines the balance of payments and foreign exchange rates. We will define and be able to identify the balance of payments, a closed economy, an ...

Discussionlong-term investment and cost-benefit analysis

Discussion "Long-Term Investment and Cost-Benefit Analysis" Please respond to the following: • From the scenario for Katrina's Candies, suggest one method in which Herb could use a cost-benefit analysis to argue for or a ...

These questions are about the usa industrialization and

These questions are about the USA Industrialization and Economic Development. At least 200 words for each question! 1. What is meant by the term "development" inneo-classic economics? How might your answer to this questi ...

Human relations amp workforce planningpharmanetixfor your

Human Relations & Workforce Planning PHARMANETIX For your final project, you need to write a 10-15 page proposal to me, the Chairman of the Board for Pharmanetix. Here are some helpful hints when writing this proposal: 1 ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate