The real rate of return from a mining project is 14%. If the inflation rate over the entire life of the mine is 5.5 %, then the nominal rate of return in %, is (round off up to 2 decimals)
Correct Answer: 20.27
Solution and Explanation
Top Questions on Mine valuation
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Production planning of a small quarry having 3 years of life is shown in the figure. The following information of revenue and cost data are available.
Selling price of ore = Rs. 1500/tonne
Ore mining cost = Rs. 500/tonne
Waste mining cost = Rs. 500/m\(^3\)
Initial capital = Rs. 1000 million
Discount rate = 10%
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