Your mining company is considering an expansion of operationsinto iron ore. Your engineers surveyed a particular piece of landthree weeks ago (the survey cost $45,000) andconcluded the following:

• You can extract 2,500 tons of iron ore peryear.
• There are 10,000 tons of iron ore underneaththis land. Once all the ore has ?been extracted, the project willcease to produce any revenues.
• The price of ore will remain constant for the next 4 years.Currently ore sells ?for $120 per ton.
• The operating cost to extract the ore will be $80 perton for the next 4 years.
• We can invest in the equipment for this project right now for$100,000.
• The equipment will be fully depreciated over a period of fouryears using the ?straight-line method.
• At the end of year 4, we can sell the equipment involved in theproject for ?$25,000
• The expansion requires additional working capital (NWC) of$15,000 from ?the start (at time t=0) until theend of year 4. At time t=4, working capital ?decreases to $0.
• The tax rate is assumed to be 35%. Your cost of capital is11%.

Please provide the Free Cash Flow for each yearof this project (times t=0 through t=4) and compute theproject’s NPV.

T = 0 Cash Flow: ___________

T = 1 Cash Flow: ___________

T = 2 Cash Flow: ___________

T = 3 Cash Flow: ___________

T = 4 Cash Flow: ___________

Project NPV: ___________