Lecture_8 +Notes

Lecture_8 +Notes - 2-1Lecture#8Mini Case: Bethesda

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 2-1Lecture#8Mini Case: Bethesda Mining2-2Equipment85,000,000 Land cost6,000,000 Aftertax land value7,000,000 Reclamation costs at Year 42,800,000 Charitable expense at Year 57,500,000 Data for the case2-3Contract sales/tons500,000 Year 1 production620,000 Year 2 production680,000 Year 3 production730,000 Year 4 production590,000 Contract /ton95 Spot market /ton90 Variable cost/ton31 Fixed costs4,300,000 NWC percent5%Tax rate38%Required return12%Data for the case2-47- Year MACRSYear 1 depreciation14.30%Year 2 depreciation24.50%Year 3 depreciation17.50%Year 4 depreciation12.50%Data for the case2-5Case SolutionEquipmentLandNWCTotalThe current aftertax value of the land is _____. The initial outlay for net working capital is the percentage required net working capital times Year 1 sales, Initial net working capital =So, the cash flow at Year 0 is:2-6Case SolutionYear 1Year 2Year 3Year 4Year 5Year 6Total productionContract productionAccess production (spot sales)2-7Case Solution...
View Full Document

Page1 / 15

Lecture_8 +Notes - 2-1Lecture#8Mini Case: Bethesda

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online