Good idea to change msu campus into coal mine

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Reference no: EM131957897

Consider changing MSU’s campus into a coal mine. The mine will produce coal and will last for 50 years, after which it will need to be replaced. It will cost $150,000,000 to build and will produce $20,000,000 worth of coal per year. When the mine is closed, it will cost $15,000,000 to rehabilitate MSU’s former campus. The value of Michigan State’s campus in its current use has been estimated at $15,000,000 per year. (Assume that you can produce a full year’s worth of coal in the same year that the mine is built). If the social discount rate is 3% per year, is it a good idea to change MSU’s campus into a coal mine?

Reference no: EM131957897

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