loredobrooke5245
loredobrooke5245
12.09.2021 • 
Business

Test:Unit 4 Midterm Question 16
This Test: 100 pts possible

You are considering investing in a new gold mine in South Africa. Gold in South Africa is buried very​ deep, so the mine will require an initial investment of million. Once this investment is​ made, the mine is expected to produce revenues of million per year for the next 20 years. It will cost million per year to operate the mine. After 20​ years, the gold will be depleted. The mine must then be stabilized on an ongoing​ basis, which will cost million per year in perpetuity. Calculate the IRR of this investment. ​(Hint​: Plot the NPV as a function of the discount​ rate.)

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