. [3] Suppose you are considering buying a gold deposit. It will cost $1 million per year to construct a mine so that gold can be extracted. The construction period lasts 3 years. In the fourth year, production starts. Each year the mine operates, it will yield a net return (total revenue minus total cost) of $5,000, 000. Gold can be extracted for 6 years. Interested rates are 5%. a. What is the present value of the total net return (total benefit)

The present value of the total net return (total benefit) is $21,922,868.23

Explanation:

As the yearly net return is a form of annuity cash flow.

To calculate the present value of the total net return we will use the following formula

First we need to determine the present value of net return at the end of year 3, then we will discount further to calculate the present value at year 0

Present value of net return at the end of year 3 = Yearly net return x ( 1 - ( 1 + Interest rate )^-Number of extraction years ) / Interest rate

Where

Yearly net return = $5,000,000

Interest rate = 5%

Number of extraction years = 6 years

Present value of net return at the end of year 3 = ?

Placing values in the formula

Present value of net return at the end of year 3 = $5,000,000 x ( 1 - ( 1 + 5% )^-6 ) / 5%

Present value of net return at the end of year 3 = $5,000,000 x 5.0756921

Present value of net return at the end of year 3 = $25,378,460.34

Now we need to discount the value further to calculate the present value at year 0

Present value of net return at the end of year 0 = Present value of net return at the end of year / ( 1 + Interest rate  ) ^numbers of year

Present value of net return at the end of year 0 = $25,378,460.34 / ( 1 + 5% )^3

Present value of net return at the end of year 0 = $21,922,868.23

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

the answer is: c.that person might be arrested and deported

filling w-4 form incorrectly usually would rise suspicions from government's auditors. when they notice such mistakes, they would send their teams to investigate the situation further.

if those investigation teams believe that the incorrectness is done on purpose (with malicious intent), that person can be arrested or deported