Minimum expected annual revenue of the project

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Reference no: EM131262354

A mining project has an initial cost of $875,000 with operating costs of $400,000 per year decreasing $10,000 each year. Overhead costs such as material transportation, etc account for $12,000 per year in year 1 with a 1% rate of increase per year Every 8 years the machinery must be replaced with newer models at a cost of $350,000 and expected selling price of the old models at $12, 500. After year 24 the mine will deplete and the project will permanently close Additionally, every 5 years there is an expected safety upgrade creating a cost of $300,000. What should be the minimum expected annual revenue of the project if the entire operation is evaluated at a Future Worth of $2 25 million in year 249 The interest rate is 10%

Reference no: EM131262354

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