Question 4 Two years ago, a mining company acquired the mineral rights to a property for which an of

Question 4 Two years ago, a mining company acquired the mineral rights to a property for which an offer of $1.8 million cash has been received now, at time 0, to sell the property. Development of the property is projected to generate cash flow in millions of dollars of -1.3 in time zero, and +1.5, +1.9, +2.1, +1.8 and +1.5 in years one through five, respectively. If the minimum DCFROR is 18%, should the company keep and develop the property or sell if there is considered to be a 60% probability of development generating the year one through four positive cash flow and 40% probability of failure generating zero cash flow in years one through five? (20 pts)

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