It is estimated that a copper mine will produce 10,000 tons of ore during the coming year. Production is expected to increase by 5% per year thereafter in each of the following six years. Profit per ton will be $14 for years one to seven. a. Draw a cash flow diagram for this copper mine operation from the company's viewpoint. b. If the company can earn 10% per year on its capital, what is the equivalent of the coppermines cashflow in year seven?

5. The GAP company has some of its jeans manufactured under a contract with an independent clothing designer; JSC Inc. If JSC operating cost is $35,000 per year in years 1 – 2, but then expenses increase by 9% per year through year 8. a. Draw and label the cash flow diagram b. What is the present worth of this operating cost model at year 0 assuming an interest rate of 15% per year?