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The duration of the mine, in the week is 5 days for two years

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A copper mine of limited reserve, 1,500,000 tons contains 4% copper. Production is 1000 tpd on a 5 day week. Production is 50% the first year and 75% the second year. Mining costs and processing costs average $50 per ton. Federal and state taxes are 36%. Depletion allowance is 15%. Copper is 90 cents per pound and the price is stable. Sellers get 1,000,000 now and 1,000,000 at the start of the second and first years. They also receive a 5% royalty on the copper produced at the refinery. Depreciation is on a unit production rate. The refinery at the end of the term is worth 60% of the original net cost. The company operates on a 25% rate of return. Should they invest? A copper mine of limited reserve, 1,500,000 tons contains 4% copper. Production is 1000 tpd on a 5 day week. Production is 50% the first year and 75% the second year. Mining costs and processing costs average $50 per ton. Federal and state taxes are 36%. Depletion allowance is 15%. Copper is 90 cents per pound and the price is stable. Sellers get 1,000,000 now and 1,000,000 at the start of the second and first years. They also receive a 5% royalty on the copper produced at the refinery. Depreciation is on a unit production rate. The refinery at the end of the term is worth 60% of the original net cost. The company operates on a 25% rate of return. Should they invest

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