The simplico gold mine has a great deal of remaining gold deposits, and you are part of
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Question:
The simplico gold mine has a great deal of remaining gold
deposits, and you are part of a team that is considering leasing
the mine from its owners for a period of years. Gold can be
extracted from this mine at a rate of up to ounces per
year at a cost of $ per ounce. This cost is the total
operating cost of mining and refining, exclusive of the cost of
the lease Currently the market price of gold is $ per ounce.
The interest rate is Assuming that the price of gold, the
operating cost, and the interest rate remain constant over the
years period, what is the present value of the lease?
Related Book For
Business Statistics A Decision Making Approach
ISBN: 9780133021844
9th Edition
Authors: David F. Groebner, Patrick W. Shannon, Phillip C. Fry
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