Highland Mining and Minerals Co, analyzes the purchase of two gold mines. I will make a single investment. The Australian mine will cost $1,600,000 and produce $300,000 per year in years five to 15 and $500,000 per year in years 16 to 25. The United States gold mine will cost $2. million dollars and will produce $250,000 annually for the next 25 years. The cost of capital is 10 percent. a) What investment should you make? (Note: When looking at the present value factors for this problem, you will need to use the concept of a deferred annuity for the Australian mine. The returns for years five through 15 inclusive represent 11 years: the returns for years 16 through 25 represent 10 years).

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