The mine must then be stabilized on an ongoing basis which


You are considering investing in a gold mine in South Africa. Gold in South Africa is buried very deep, so the mine will require an initial investment so $ 250 million. Once this investment is made, the mine is expected to produce revenues of $ 30 million per year for the next 20 years. It will cost $ 10 million per year to operate the mine. After 20 years, the gold will be depleted. The mine must then be stabilized on an ongoing basis, which will cost $ 5 million per year in perpetuity. Calculate the PW of this investment, if the yearly interest rate is 5%.

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Accounting Basics: The mine must then be stabilized on an ongoing basis which
Reference No:- TGS01353101

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