You are considering an open-pit mining operation. The cash flow pattern is somewhat unusual since you must invest in some mining equipment, conduct operations for two years, and then restore the sites to their original condition. You estimate the net cash flows to be as follows: N Cash flow $1,600,000 1,500,000 1,500,000 -700,000 1 3 What is the approximate rate of return of this investment? (a) 25% (b)38% (c) 42% (d)62%

You are considering an open-pit mining operation. The cash flow pattern is somewhat unusual since you must invest in some mining equipment, conduct operations for two years, and then restore the sites to their original condition. You estimate the net cash flows to be as follows: N Cash flow $1,600,000 1,500,000 1,500,000 -700,000 1 3 What is the approximate rate of return of this investment? (a) 25% (b)38% (c) 42% (d)62%

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...

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