7s.2 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 close and restore the sites to their original condition. You estimate the net cash flows to be as follows: Cash Flows - $1,600,000 1 $1,500,000 2 $1,500,000 3 -$700,000 What is the approximate rate of return of this investment? а. 25% b. 38% C. 42% d. 62%

7s.2 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 close and restore the sites to their original condition. You estimate the net cash flows to be as follows: Cash Flows - $1,600,000 1 $1,500,000 2 $1,500,000 3 -$700,000 What is the approximate rate of return of this investment? а. 25% b. 38% C. 42% d. 62%

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section: Chapter Questions

Problem 19P

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