Calculate the operating cash flows for the gold mine project

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With the market price of gold at ?C$1,562.50 per ounce? (C$ stands for Canadian? dollars), Maritime Resources? Corp., a Canadian mining? firm, would like to assess the financial feasibility of reopening an old gold mine that had ceased operations in the past due to low gold prices. Reopening the mine would require an? up-front capital expenditure of ?C$67.9 million and annual operating expenses of ?C$19.36 million. Maritime expects that over a? 5-year operating life it can recover 174,000 ounces of gold from the mine and that the project will have no terminal value. Maritime uses? straight-line depreciation, has a 21.01?% corporate tax? rate, and has? a(n) 11.5?% cost of capital.

Question a. Calculate the operating cash flows for the gold mine project.

Question b. Depict on a timeline the net cash flows for the gold mine project.

Question c. Calculate the internal rate of return? (IRR) for the gold mine project.

Question d. Calculate the net present value? (NPV) for the gold mine project.

Reference no: EM132657190

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