Values of the cost of capital

Assignment Help Operation Management
Reference no: EM131012880

Copco Mining, a copper mining company is considering a mining project that will have an initial cost of $4,550,000 and generate revenues of $3,500,000 per year for three years. During the fourth year, the mine will be shut down and there will be clean-up costs of $ 6,000,000 to restore the land to its original state, (a process that will be completed during the fourth year.) The plot of the NPV of this project (i.e., its NPV profile) for interest rates varying from 0 to 20% is given below. Can you use the IRR rule to decide whether to undertake this project or not? Why or why not? Explain. According to this profile for what values of the cost of capital is it worth undertaking the project? Explain why.

Reference no: EM131012880

Questions Cloud

Determining the original loan value : A loan is being repaid by monthly installments of $100 at i^(12) = 0.18. If the loan balance after the fourth month is $1200, what is the original loan value?
Find resultant force water exerts on side a and b of tank : The tank is filled with water to a depth of d = 4 m. Determine the resultant force the water exerts on side A and side B of the tank. If oil instead of water is placed in the tank, to what depth d should it reach so that it creates the same result..
Summarize the theory of victimization : Summarize the theory of victimization, describing its meaning and core concepts as it relates to the nature of crime. Identify subcategories of the theory and describe each
What are the possible time scales : Given that the units of x and t are length and time, what are the units of m, k, a? What are the possible time scales and on which physical processes are they based?
Values of the cost of capital : Can you use the IRR rule to decide whether to undertake this project or not? Why or why not? Explain. According to this profile for what values of the cost of capital is it worth undertaking the project? Explain why.
Prepare stockholders equity section for fechter corporation : Fechter Corporation uses the cost method of accounting for treasury stock. In 2014, the company reported net income of $26,110. Open accounts for Paid-in Capital from Treasury Stock, Treasury Stock, and Retained Earnings. Post to these accounts using..
What is the hydraulic gradient in the aquifer : The surface elevations of A, B, and C are 95 m, 110 m, and 135 m respectively. The depth of water in A is 10 m, in B is 40 m, and in C is 35 m. Make a map of the piezometric surface, drawing equipotential lines at increments of 5 m.
Do you believe crimes could be prevented : Do you believe crimes could be prevented or at least limited by the examples given in situational crime prevention theory? Why or why not
What return did the portfolio earn : What return did the portfolio earn? If you don't buy or sell any shares after the price change, what are your new portfolio weights? For c, count the new portfolio weights for GoldFinger, Moosehead, and Venture Associates.

Reviews

Write a Review

Operation Management Questions & Answers

  Exponential smoothing with trend to forecast monthly demand

A manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. At the end of December, the company wishes to forecast sales for January

  Explain the economic production

The economic production quantity is 500 units (units are delivered to the user department as they come off the production line). If the firm decides to buy this item from an outside supplier rather than producing it, the economic purchase quantity..

  Human resources is composed of many integrated activities

Human Resources (HR) is composed of many integrated activities within an organization. External factors also affect human resource activities and how they are designed, managed and modified. Of the seven tasks an HR manager does, which do you think i..

  What would his total ordering cost be for the year

There are 360 working days per year and the lead-time is 5 days. If Mark orders 200 units each time he places an order, what would his total ordering cost be for the year?

  Take stand and hire disabled person to break the ice

You are the newly hired HR manager in a family-run organization with a long standing informal policy of not hiring people with disabilities. You do a bit of investigation and discover the thought internally, that disabled workers will not be as produ..

  Which amounts to allocating about wheatie

Wheatie should be allocated 35% more space than Grano, which amounts to allocating about 57% to Wheatie also 43% to Grano. Illustrate what do you think.

  Distinguish between a general benefit and a specific benefit

Distinguish between a general benefit and a specific benefit. Why do customers respond positively to specific benefits?

  Discuss the appropriate marketing-mix strategy

Marketers traditionally classify products on the basis of characteristics: durability, tangibility, and use (consumer or industrial). Discuss the appropriate marketing-mix strategy for each product type by way of real-life examples.

  Design help non-technical entrepreneur

Do you think that the general perspective on web design of Starting an Online Business is reflected in the Usability.gov and Web Monkey websites? Briefly explain. Briefly discuss how having a basic understanding of web programming and web design help..

  Publishers adapted the gross revenue step deal model

Why have record labels and publishers adapted the “Gross Revenue” Step deal model in place of the traditional Theatrical step (Box Office Bumps) deal that had been standard in music clearance for decades?

  Write an equation that represents the total cost

Write an equation that represents the total cost to put on the seminar, where x represents the number of students who enroll in the seminar.

  What kind of training and development process is in order

Senior Management has decided to initiate several new product development and project management efforts and meets to discuss potential leaders from the work. How does Senior Management deal with this lack of proven project managers? What is the unde..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd