Mineral rights of a mining company can be acquired by a company for a $ 7 5
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Question:
Mineral rights of a mining company can be acquired by a company for a $
million lease bonus cost at time A mineral development cost of $ million and
mine equipment cost of $ million will be incurred at time Year one
production will be million tons of ore from initial reserves estimated to be
million tons. The net smelter return value of the ore is estimated to be $ per
ton. Royalties are of gross income operating costs in year one are estimated
to be $ million. Assume year life MACRS depreciation starts in year using
the half year convention. Expense of the mine development cost at time zero.
Deduct the remaining by amortizing with a six month deduction at time
zero. Assume a effective federal and state income tax rate and determine the
estimated cash flow during time zero and year one for a corporation assuming
standalone loss carry forward economic analysis. Examine the impact on the
after tax cash flows if bonus depreciation is claimed in year one. Please do this in excel and show work please.
Related Book For
Statistics For The Behavioral Sciences
ISBN: 9781111830991
9th Edition
Authors: Frederick J Gravetter, Larry B. Wallnau
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