North West Mining Is Evaluating the Introduction of a New

question 98

Multiple Choice

North West Mining is evaluating the introduction of a new ore production process.Two alternatives are available.Production Process A has an initial cost of R25,000, a 4-year life, and a R5,000 net salvage value, and the use of Process A will increase net cash flow by R13,000 per year for each of the 4 years that the equipment is in use.Production Process B also requires an initial investment of R25,000, will also last 4 years, and its expected net salvage value is zero, but Process B will increase net cash flow by R15,247 per year.Management believes that a risk-adjusted discount rate of 12 percent should be used for Process A.If California Mining is to be indifferent between the two processes, what risk-adjusted discount rate must be used to evaluate B?

• A) 8%
• B) 10%
• C) 12%
• D) 14%
• E) 16%

Illustrate the challenges posed by widespread political corruption in the economic development of developing nations.

Describe how technological advances, such as new fertilizers, can support economic development in different topographical and climate conditions.

Recognize the role of international aid and institutions, like the World Bank, in supporting economic development in developing nations.

Understand the impact of foreign aid flow and its distribution among developing nations.

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Definitions:

Review Technique

A method or procedure used to evaluate and assess something systematically.

Scheduling Tool

A software application or system used to plan, allocate, and manage tasks and resources over time, enhancing organizational efficiency.

Idea Generation

The creative process of generating, developing, and communicating new ideas to solve problems or exploit opportunities, often in a collaborative setting.

Microsoft Project

A project management software designed to assist project managers in developing plans, assigning resources, tracking progress, managing budgets, and analyzing workloads.