Solution-Problem regarding the issuing shares

Problem regarding the issuing shares

Assignment Help Accounting Basics

Reference no: EM13964590

You own an unused gold mine that will cost $100,000 to reopen. If you open the mine, you expect to extract 1,000 ounces of gold a period for each of the next three periods. After that the deposits will be exhausted. Gold price is currently $500 an ounce. At the beginning of each subsequent period is equally likely to rise or fall by $50 from the previous period. The extraction cost is $460 an ounce. If you raise the capital you need to reopen by issuing shares, shareholders expect a 10% return. If you borrow, the bondholders require a 7% return. Should you open the mine? Show your work. You may answer the question in a spreadsheet. Upload your spreadhseet.

Reference no: EM13964590

Questions Cloud

Construct confidence interval estimate for creativity score : Construct a 98% confidence interval estimate for the difference between the mean creativity score for those with a red background and the mean creativity score for those with a blue background.

Compute peter and amys income tax liability : Compute Peter and Amys income tax liability for the current year using Form 1040, Schedules A and B, and Form 8283, if necessary.

How much work must be done on the air to compress it : Suppose that 5gm of air is adiabatically compressed so as to raise its temperature from 20deg to 400 deg. How much work must be done on the air to compress it?

Estimate the distance to a lightning flash : You can estimate the distance to a lightning flash by counting the seconds that elapse between the time you see the flash and when you hear the accompanying thunder. The approximate distance in miles is obtained by dividing the time in seconds by 5..

Problem regarding the issuing shares : If you raise the capital you need to reopen by issuing shares, shareholders expect a 10% return. If you borrow, the bondholders require a 7% return. Should you open the mine? Show your work. You may answer the question in a spreadsheet. Upload you..

At 105km/h, what is the rate of gasoline consumption in l/h : How much power is the engine producing at 105km/h? Assume that the engine is operating at its theoretical efficiency, and give your answer in watts and in horsepower. By comparison, the engine of the car has a maximum power of 236hp.

How much closer to the source can you move before the sound : An intensity of 1.0;{rm W}/{rm m}^{2} is often used as the "threshold of pain". How much closer to the source can you move before the sound intensity reaches this threshold?

Explain the difference between variable costing : Explain the difference between variable costing and absorption costing net operating income in year 1. Also, explain why the two net operating incomes differ in year 2.

Calculate the resonant frequency : Assume that the outer ear canal is a cylincrical pipe 3 cm long, closed at one end by the eardum. Calculate the resonant frequency (fundamental, v1) of this pipe. Our hearing should be especially sensitive for frequencies near this resonance.

User Account

All Pages

Problem regarding the issuing shares

Reference no: EM13964590

Reference no: EM13964590

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT