Eme 460 summer 2014 homework 1

Instructions: Please answer all questions clearly and completely. If you use graphs or tables in your answers, they must be clear enough that I can understand them (this means labeling axes, variables, and so forth). If a question requires you to make calculations, you must show your work. Your homework should either be typed up or scanned if it is handwritten. The typed homework should be in format of 12 font, Time New Roman with 1.5 line spacing. Each question is worth an identical number of points. Please email your work to [email protected] before the deadline.
Cash Flow in Natural Resources Extractive Projects
This Oil-Gas/Mining project generates 1 million units of production per year (Oil=Barrels, Mining=Tons of Ore). Every unit of production (tons or barrels) is priced at $145 per unit. Project starts in year zero (now). Revenues and costs will be realized in year one and will stop in year 32. Use a fixed (constant) cost of $8 million per year. Capital costs in year zero (start of the project) is $200 million. The production cost per unit is $9.0, and the processing cost per unit is $19.0
1. Based on the information above, create a table in excel and calculate annual costs and profits year by year and determine net profits (or losses) covering 32 years. (Please attach your excel table)
2. Sum all the 32 year net total profits including capital costs in year zero. Use excel and report the total Sum. (Please attach your excel table)
3. What is the price per unit that will make this project breakeven (zero profit)? Also solve this in excel.
4. Based on the cash flow from 32 years life, use the discount formula in every year to calculate the total net present value of your project. Please us the discount rate of 8%.
5. Assuming we want to close operations in our project at the end of year 20, use the compound formula (from 0 to year 20) to calculate the “future” value of this project at year 20. Assume a discount rate of 8%.
6. Using now a project life of 20 years from question 5, the CEO of the company is considering buying at the end of year 10 a fleet of 30 new trucks with a cost per truck of $6 million dollars, you as the project manager of the operation need to decide if this strategy keeps the total discounted value of
the project economical. Calculate the net present value (NPV) of this project.
Assume a discount rate of 8%.
7. Using the cash flows of the project in question 6, with a project life of 20 years, including the costs of the new trucks, you are now planning to sell all the project infrastructure at the end of year 20 (salvage value) for $150 Million what is the net present value (NPV) of the project (at year zero).
Assume a discount rate of 8%.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
error: Content is protected !!
Open chat
You can contact our live agent via WhatsApp! Via + 1 929 473-0077

Feel free to ask questions, clarifications, or discounts available when placing an order.

Order your essay today and save 30% with the discount code GURUH