Calculate the Annual Worth of the Given Proposal
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Mining Company is considering investing in a piece of land that may be purchased for $610,000 (today) to be open pit-mined for copper for the next 10 years. The mine is expected to produce income of $200,000 at the end of each year for 10 years. At the end of 10 years, the land will be restored in line with federal law requirements , which will cost $175,000 at that time. Assume Mining Company's MARR is 10% per year, compounded annually.
A. Calculate the annual worth for this investment.
B. Is the land investment acceptable?
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Solution Summary
Solution depicts the steps to estimate the annual worth in the given case.
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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