A publicly traded mining company must ascertain the financial viability of doing so and has a chance to develop a mine comprising gold, cobalt, and bismuth in Canada’s Northwest Territories.
In order to measure the charm of the endeavor, the firm needs to assess the net present value of the opportunity, specified variants that are uncertain and volatile, for example commodity prices and foreign exchange rates. The firm must also consider several qualitative concerns that will change the job, such as relations with First Nations communities.
Learning Objective: The case gives pupils the chance to exemplify various capital budgeting/managerial accounting tools, including net present value, internal rate of return, and payback.
Given the uncertainty of the financial inputs, pupils can also perform scenario and sensitivity analysis. Additionally, this case allows students to better comprehend the metals and minerals industry and address some key qualitative factors changing companies in that sector.
Publication Date: 08/19/2011
This is just an excerpt. This case is about Accounting
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