Repeat Problem 17.18 assuming that the volatility of gold is 20% and that once opened, the mine
Question:
In problem 17.18
A mine costing $1000 will produce 1 ounce of gold per year forever at a marginal extraction cost of $250, with production commencing 1 year after the mine opens.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 71% (14 reviews)
The value of a producing mine is V p S 5000 PutPerpetual which is the value of not shutting down th...View the full answer
Answered By
Mugdha Sisodiya
My self Mugdha Sisodiya from Chhattisgarh India. I have completed my Bachelors degree in 2015 and My Master in Commerce degree in 2016. I am having expertise in Management, Cost and Finance Accounts. Further I have completed my Chartered Accountant and working as a Professional.
Since 2012 I am providing home tutions.
3.30+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Banking questions
-
Assume now that the volatility of stock is 15 percent annually. The volatility of changes in yields is 1 percent annually. Assuming zero correlation between stocks and bonds and normal distributions,...
-
Repeat the simulation in Problem F.17, assuming that the reorder point is 4 units rather than 2. Compare the costs for these two situations. Again use the same random numbers as in Problem F.7? In...
-
Repeat Problem 17.6, only assume that after the stock is excavated, the land has an alternative use and can be sold for $30m. In problem 17.6 The stock price of XYZ is $100. One million shares of XYZ...
-
Problems 113 122. The purpose of these problems is to keep the material fresh in your mind so that you are better prepared for later sections, a final exam, or subsequent courses such as calculus. X...
-
A study was conducted to investigate the effectiveness of hypnotism in reducing pain. Results for randomly selected subjects are given in the accompanying table. The values are before and after...
-
Two polarizers are oriented at 42.0 to one another. Light polarized at a 21.0 angle to each polarizer passes through both. What is the transmitted intensity (%)?
-
The velocity ratio of first system of pulleys is 2n. True or False
-
The following units of a particular item were available for sale during the year: Beginning inventory ....... 100 units at $60 Sale ............... 75 units at $112 First purchase ............ 155...
-
85,000 and that the price p is a P Suppose that the demand function for a product is given by D(p) = function of time given by p= 1.7t+7, where t is in days. a) Find the demand as a function of time...
-
After conducting an internal audit, a firm discovers a total of 100 strengths and 100 weaknesses. What procedures then could be used to determine the most important of these? Why is it important to...
-
You have a project costing $1.50 that will produce two widgets, one each the first and second years after project completion. Widgets today cost $0.80 each, with the price growing at 2% per year. The...
-
Repeat Problem 17.18 assuming that the volatility of gold is 20% and that once opened, the mine can be costlessly shut down once, and then costlessly reopened once. What is the value of the mine?...
-
Solar energy stored in large bodies of water, called solar pounds, is being used to generate electricity. If such a solar power plant has an efficiency of 3 percent and a net power output of 180 kW,...
-
A a) Find the location of the maximum sag point. b) Find the max and min cable tension. q=4kN/m L = 20m 2 m B 7 m
-
Verify the following identities: a) cosx csc x- csc x = - sin x b) (1 tan x)(1- cot x) = 2 c) cos20-tan20 sin20 = cot20sec 20 d) 4sin20+2cos20 = 4 - 2cos20 e) f) 1+secz secr cos(a+3) sin a cos 3 sin...
-
Martson and Co. made the following journal entries: Accounts Receivable 25,000 Sales Revenue 25,000 Cost of Goods Sold 10,000 Inventory 10,000 What is Martson's gross profit from this sale?
-
Suggests that ethical leaders should empower employees to uphold corporate norms and values, building a strong culture within the organization, but just how can a leader empower employees without...
-
5. An economys AD (Aggregate Demand) function is Y = 1000 2P and AS (Aggregate Supply) function is P = 20 + 0.1Y. Show these two lines in a graph. Label graphs. Find the equilibrium price level (P)...
-
Solve the inequalities. Express the solution sets as intervals or unions of intervals and show them on the real line. Use the result a 2 = |a| as appropriate. x 2 - x < 0
-
Why is inventory management important for merchandising and manufacturing firms and what are the main tradeoffs for firms in managing their inventory?
-
Looking again at Bank A and Bank B in Problem, based on the information available, which bank do you think is at the greatest risk of insolvency? What other information might you use to assess the...
-
Bank Y and Bank Z both have assets of $1 billion. The return on assets for both banks is the same. Bank Y has liabilities of $800 million while Bank Zs liabilities are $900 million. In which bank...
-
You are a bank manager and have been approached by a swap dealer about participating in fixed for floating interest-rate swaps. If your bank has the typical maturity structure, which side of the swap...
-
2 If tan 08, sin 0 <0, find the exact value of each of the following for 00 <2x (a) sin (20) 0 (b) cos (20) (c) sin 2 (d) cos 2 (a) sin (20)= (Type an exact answer, using radicals as needed.) (b) cos...
-
Suppose you invest 52%, 28%, and 20% of your wealth into a stock, the market, and a risk-free asset, respectively. The beta of the stock is 1.1. What is the beta of the portfolio?
-
An investment of $21745, earning compound interest, grows by $2278 in one year. At this rate of growth, how long will it take for the original investment to double?
Study smarter with the SolutionInn App