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Windhoek Mines, Ltd. of Namibia,...

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Accounting

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Windhoek Mines, Ltd. of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area: 'Receipts from sales of ore, less out-of-pocket costs for salaries, utlitles, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company's required tate of return is 18%, Click here to view Exhibit:128-1 and Exhibit128.2, to determine the approprlate discount factor(s) using tables. Required: a. What is the net present value of the proposed mining project? b. Should the project be accepted? Exhiart 128-2 Present Volue of an Annuty of 51 in Arrears; 1[10+r31] EXHert 128-1 Present Value of 31

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