What is the average cash flow

Assignment Help Financial Management

Reference no: EM131874704

A silver mine can yield 12,000 ounces of silver at a variable cost of $34 per ounce. The fixed costs of operating the mine are $42,000 per year. In half the years, silver can be sold for $50 per ounce; in the other years, silver can be sold for only $25 per ounce. Ignore taxes.

a. What is the average cash flow you will receive from the mine if it is always kept in operation and the silver always is sold in the year it is mined? (Do not round intermediate calculations.)

b. Now suppose you can costlessly shut down the mine in years of low silver prices. What happens to the average cash flow from the mine? (Do not round intermediate calculations.)

Reference no: EM131874704

Questions Cloud

What is the expected excess return for each stock : Suppose the CAPM holds, what is the expected excess return for each stock?

Why are some executive orders controversial : What are executive orders and upon what powers are they based? Why are some executive orders controversial?

Solve a queing problem for your business unit : Formulate develop, and solve a queing problem for your business unit. For example, the phone calls coming to the receptionist, or work arriving by mail, phone.

Why hyperthermophile is unlikely to be human pathogen : Explain why hyperthermophile is unlikely to be human pathogen and explain why and how refrigerator , freezing,and curing a meat in salt are each mechanism

What is the average cash flow : What is the average cash flow you will receive from the mine if it is always kept in operation and the silver always is sold in the year it is mined?

A brief historical description of the system : Every state in the United States has public health surveillance and monitoring systems that serve multiple purposes.

Discuss the concept of the forecasting : Forecasting is important for virtually all operations, but it is part art and part science. Can these live together?

What exactly does the string method replace do : What does the i pattern modifier do? What exactly does the String method replace do? What exactly does the String method match do?

What is the diagnosis of charlie : What is the diagnosis of Charlie? What is the infectious agent? How did Charlie get this? Why doesn't this occur with adults?

User Account

All Pages