Deep Mines Ltd. of Saskatchewan 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: Cost of new equipment and timbers i Working capital required Net annual cash receipts Cost to construct new roads in three years Salvage value of equipment in four years *Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance and so forth. 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%. Click here to view Exhibit 10-1 and Exhibit 10-2. to determine the appropriate discount factor(s) using tables. Required: 1-a. Determine the NPV of the proposed mining project. (Negative amount should be indicated with a minus sign. Round discount factor(s) to 3 decimal places. Round other intermediate calculations and final answer to the nearest whole number.) Net present value $276,000 94,000 128,000* 49,000 50,000 $ 1-b. Should the project be accepted? O Yes O No

Most Company has an opportunity to invest in one of two new projects. Project Y requires a $325,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $325,000 investment for new machinery with a three-year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight-line depreciation, and cash flows occur evenly throughout each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)    Project Y Project Z Sales   $ 370,000     $ 296,000   Expenses                 Direct materials     51,800       37,000   Direct labor     74,000       44,400   Overhead including depreciation     133,200       133,200   Selling and administrative expenses     26,000       26,000   Total expenses     285,000       240,600   Pretax income     85,000       55,400   Income taxes (38%)     32,300       21,052   Net income   $ 52,700     $…

Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineraldeposit 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 inthe area:Cost of new equipment and timbers .............................................. R275,000Working capital required ................................................................ R100,000Annual net cash receipts ............................................................... R120,000*Cost to construct new roads in three years ................................... R40,000Salvage value of equipment in four years ..................................... R65,000*Receipts from sales of ore, less out-of-pocket costs for salaries, utilities,insurance, and so forth.The currency in Namibia is the rand, denoted here by R.The mineral deposit would be exhausted after four years of mining. At…

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