What is the irr for the gold mine

Assignment Help Finance Basics
Reference no: EM132535185

The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, "This is a golden opportunity." The mine will cost $4,400,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $545,000 at the end of the first year, and the cash inflows are projected to grow at 8 percent per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $600,000 at the end of Year 11.

a. What is the IRR for the gold mine? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

b. The Utah Mining Corporation requires a return of 8 percent on such undertakings. Should the mine be opened?

Reference no: EM132535185

Questions Cloud

How would have approached the communication : If the tables were turned, how would you have approached the communication of the same information
Make a journal entry to credit sales : Foresight Computer Services is showing a large amount in the Undeposited Funds account. Make a journal entry to credit sales
Essay addressing actual sharp issues from army : Essay addressing actual SHARP issues from the Army - and making recommendations on how all leaders at all levels can implement potential solutions.
What is an agency relationship : What is an agency relationship? When you first begin operations, assuming you are the only employee and only your money is invested in the business
What is the irr for the gold mine : The Utah Mining Corporation requires a return of 8 percent on such undertakings. Should the mine be opened?
Discuss the difference between real gdp and nominal gdp : Discuss the difference between real GDP (gross domestic product) and nominal GDP, which is used by economists to measure economic well-being and why
What are the issued and outstanding shares : Long-Term Debt Payable [not including current portion] $40,250 and Prepaid expenses $4,820. What are the Issued and outstanding shares
Finding a solution with a negative value : Finding a solution with a negative value indicated by a minus sign, not rounding intermediate calculations, and rounding a solution to two decimal places
How does program meet your specific needs and goals : What device do you most often use for your favorite program watching or other chosen media? How does the program meet your specific needs and goals?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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