Exercise EXERCISE 10-1 Performing an NPV Analysis (LO1- CC4; LO2-CC8] Windhoek Mines Ltd. of Namibia 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- R200,500 Cost of new equipment and timbers 75,000 Working capital required 90,000 Net annual cash receipts 30,000 Cost to construct new roads in three years 48,750 Salvage value of equipment in four years "Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth (The currency in Namibia is the rand here denoted by R) 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%. Required: Determine the NPV of the proposed mining project. Should the project be accepted? Explain. EXERCISE 10-2 Performing NPV Analyses of Competing Projects [LO2 - CC8]