Question: You are considering constructing a new plant in a remote wilderness area to process the ore from a planned mining operabon. You anticipate that the
You are considering constructing a new plant in a remote wilderness area to process the ore from a planned mining operabon. You anticipate that the plant wil toke a yeac to build and cost stoo milion uptront. Once buil, it wis generate caeh fows of $15 millon per year starting two years from today. in 21 yeas, after its 20 th year of operabion, the mine will run out of ore and you oxpect to pay 5200 milion to shat the plant down and reatore the area to ins pritine state. Using a cost of capial of 12W. a. What is the NPV of the preioct? b. Is using the ifor rule reliabie for this project? Explan. 6. What are the Iffete of this project
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