A mining investment is more likely to generate revenues of $500,000 per year for the next 10 years of service life. However, the investors think that there is a possibility that the revenues could be as high as $800,000 per year or as low$300,000 per year. The investors' MARR is 8% per year. Answer the following two questions:Click the icon to view the interest and annuity table for discrete compounding when i= 8% per month.More Info1 Calculate the PW based on the optimistic estimate of the net annual revenues.Discrete Compounding; i= 8%ireO A. $3.36 MillionSingle PaymentCompoundAmountUniform SeriesCompoundAmountFactorSinkingFundCapitalRecoveryFactorO B. $3.47 MillionPresentWorth FactorPresentWorth FactorO C. $5.37 MillionFactorFactorO D. $2.01 MillionTo Find FTo Find PTo Find FTo Find PTo Find ATo Find AGiven PGiven FGiven AGiven AGiven FGiven PO E. $3.58 MillionF/PPIFFIAPIAA/FA/P11.08000.92591.00000.92591.00001.08002. Calculate the PW based on the expected net annual revenues calculated using the three-point estimation technique.21.16640.85732.08001.78330.48080.56080.30800.221931.25970.79383.24642.57710.3880O A. $5.37 Million41.36050.73504.50613.31210.301951.46930.68065.86663.99270.17050.2505O B. $3.36 Million6.1.58690.63027.33594.62290.13630.2163O C. $2.01 Million71,71380.58358.92285.20640.11210.1921O D. $3.58 Million0.54030.500281.850910.63665.74660.09400.17400.16010.149091.999012.48766.24690.0801O E. $3.47 Million102.15890.463214.48666.71010.0690112.33160.428916.64557.13900.06010.1401122.51820.397118.97717.53610.05270.1327132.71960.367721.49537.90380.04650.1265142.93720.340524.21498.24420.04130.1213153.17220.315227.15218.55950.03680.1168

Present worth is value today of future cash flow based on the interest rate and the time period of…

A mining investment is more likely to generate revenues of $500,000 per year for the next 10 years of service life. However, the inves $300,000 per year. The investors' MARR is 8% per year. Answer the following two questions: Click the icon to view the interest and annuity table for discrete compounding when i= 8% per month. Mo 1 Calculate the PW based on the optimistic estimate of the net annual revenues. O A. $3.36 Million O B. $3.47 Million OC. $5.37 Million O D. $2.01 Million O E. $3.58 Million 2. Calculate the PW based on the expected net annual revenues calculated using the three-point estimation technique. O A. $5.37 Million O B. $3.36 Million OC. $2.01 Million O D. $3.58 Million O E. $3.47 Million

A mining investment is more likely to generate revenues of $500,000 per year for the next 10 years of service life. However, the inves $300,000 per year. The investors' MARR is 8% per year. Answer the following two questions: Click the icon to view the interest and annuity table for discrete compounding when i= 8% per month. Mo 1 Calculate the PW based on the optimistic estimate of the net annual revenues. O A. $3.36 Million O B. $3.47 Million OC. $5.37 Million O D. $2.01 Million O E. $3.58 Million 2. Calculate the PW based on the expected net annual revenues calculated using the three-point estimation technique. O A. $5.37 Million O B. $3.36 Million OC. $2.01 Million O D. $3.58 Million O E. $3.47 Million

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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