Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. c71 windhoek mines, ltd., of namibia, is contempl

C71 Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit...

50.1K

Verified Solution

Question

Accounting

imageC71

Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area: Cost of new equipment and timbers $340,000 Working capital required $205,000 Annual net cash receipts $140,000* Cost to construct new roads in $ 61,000 year three Salvage value of equipment in four years $ 86,000 *Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required rate of return is 18%. Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables. Required: a. What is the net present value of the proposed mining project? b. Should the project be accepted

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A bacterial strain called XYZ living in the lake MBG223 requires to synthesize tryptophan continuously. The...

Biology
Q

1. Before reading info from the textbook, what did you believe about the amount of carbohydrate...

Biology
Q

What are the common steps involved in conducting a research? Discuss the steps involved.

Psychology
Q

b 2 05 V d 6 05 V c 4 05 V 97 3 V...

Physics
Q

Two block A and B placed on a plane surface as shown in the figure...

Physics
Q

8 1 Choose one of the answers given The null hypothesis is sample statistic or...

Statistics
Q

The following geometric sequence is missing four terms Identify any of the following answers that...

Algebra
Q

Simplify each expression 2 2 2 m 3 A B C D 2 2m 1...

Algebra
Q

Schedule of Activity Costs \table[[Quality Control Activities,Activity Cost],[Process audits,$50,000

Accounting
Q

Exercise 8-15(Static) Direct Labor and Manufacturing Overhead Budgets [LO8-5, LO8-6] Hruska Corporation's production budget...

Accounting
Q

Sarbanes-Oxley requires companies to maintain effective internal controls and thus deter fraud and prevent misleading...

Accounting
Q

Doyle Company issued $390,000 of 10- year, 8 percent bonds on January 1, Year 2....

Accounting