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Deep Mines Ld, of Saskatchewan is contemplating the purchase of equipment to exploit a mineral...

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Accounting

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Deep Mines Ld, of Saskatchewan is contemplating the purchase of equipment to exploit a mineral deposit located 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: *Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance and so forth. It is estimated that 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 discount rate is 20%. Click there to view Exhiblit 10-1 and Exhibli 102, to determine the appropriate discount factor(s) using tables. Required: 1.a. Determine the NPV of the proposed mining project. (Negative amount should be indicoted with a minus sign, Round discoumt foctor(s) to 3 decimal places. Round other intermediate calculations and final answer to the nearest whole number) 1-b. Should the project be accepted? Yes No

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