Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The government of a small South Pacific island is considering whether to allow development of a small but valuable deposit of phosphate rock. Not having the resources to develop and mine the deposit themselves, the country has the option to sell a lease to a foreign mining company for an immediate one-time fee of $12 million - resources that can be used to address many development challenges in the country1. The lease will expire (and the deposit will likely be mined out) in 20 years. A panel of experts suggests that the mining of the phosphate, despite the use of best practices to avoid contamination, will eventually result in contamination of surface and groundwater supplies in a manner that will increase health risks for some residents. Best estimates of these health-related damages (willingness to pay to avoid the damage) are a total of $18 million. Moreover, the health effects are not likely to be experienced until the end of the 20 year lease.
a. Suppose that the government of the island choose a discount rate of .04. What is the present value of the damages created by the project? What is the net present value of the project from the vantage of the government? Assuming this is the best (i.e. most efficient) way to develop the phosphate resource, is doing so justifiable on the basis of economic efficiency?
b. Find the breakeven discount rate such that the net present value of this development opportunity is zero (i.e. find the internal rate of return).
c. The government of the country has decided to allow the project to go forward. However, as a measure to deal with perceived inequities across generations, they decide to invest a substantial portion of the lease payment. Assume that $9 million is invested at a 4% annual rate (compounded annually). Will the future value of this investment be sufficient to compensate those that suffer damages in year 20?
d. Read p. 96-100 of Goodstein. How does the "environmental bond" discussed in c) help to foster sustainability in the "neoclassical" sense discussed by economists like Robert Solow?
Example of Batch Costing The budgeted variable overheads of a company for the year of 2001 are as given as: Department Overhead (shs.)
Download the financials of Shoprite , study them, then, using ratio analysis, the cash flow statement, and the segmental breakdown of the results, prepare a statement outlining the
GZ Inc. manufactures two products that require both machine processing and labor operations. Although there is unlimited demand for both products, GZ could devote all its capacitie
Requirement for additional Funds A business would require additional capital for two purposes: 1. Financing additional fixed assets, and
Direct Cost as a Relevant Cost Direct costs may be directly chargeable to a cost center or a product. They may be fixed costs or variable costs whereas it comes to decision-ma
On January 1, 2013, VKI Corporation awarded 12 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within three years. On the gr
Estimate the Growth rate of stock Data stock price = 53 rate of return= 12% expected dividend = 3.15 Formula : Expected return = (dividend paid + capital
You are reviewing a cost proposal, which includes an $800,200 direct material estimate. After Initial examination of the proposal, you note that there are 500 material items, but y
Keyser Beverage Company reported the following items in the most recent year. Net income $40,630 Dividends paid 5,390 Increase in accounts receivable 12,130 Increase i
LEV;LRV
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd