A mining investment is more likely to generate revenues of $500,000 per year for the next 10
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Question:
A mining investment is more likely to generate revenues of $500,000 per year for the next 10 years of service life. However, the investors think that there is a possibility that the revenues could be as high as $675,000 per year or as low$175,000 per year. The investors’ MARR is 8% per year. Answer the following two questions:
1 Calculate the PW based on the optimistic estimate of the net annual revenues.
2. Calculate the PW based on the expected net annual revenues calculated using the three-point estimation technique.
Related Book For
Financial Markets And Institutions
ISBN: 978-0132136839
7th Edition
Authors: Frederic S. Mishkin, Stanley G. Eakins
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