1. **Problem Statement:** CTC Mining Corporation must decide whether to mine a gold vein using sulfuric acid extraction. The initial costs are $9000 for equipment and $165000 for installation. The project will generate $350000 annually for 5 years. The cost of capital is 17%. We need to compute the Net Present Value (NPV). 2. **Formula for NPV:** $$\text{NPV} = \sum_{t=1}^n \frac{C_t}{(1+r)^t} - C_0$$ where: - $C_t$ = cash inflow at year $t$ - $r$ = discount rate (cost of capital) - $n$ = number of years - $C_0$ = initial investment cost 3. **Calculate initial investment:** $$C_0 = 9000 + 165000 = 174000$$ 4. **Calculate present value of cash inflows:** Since cash inflows are equal each year, use the Present Value of an Annuity formula: $$\text{PV} = C \times \frac{1 - (1+r)^{-n}}{r}$$ where $C = 350000$, $r = 0.17$, $n = 5$ 5. **Calculate PV:** $$\text{PV} = 350000 \times \frac{1 - (1+0.17)^{-5}}{0.17}$$ Calculate $(1+0.17)^{-5} = 1.17^{-5} \approx 0.4523$ So, $$\text{PV} = 350000 \times \frac{1 - 0.4523}{0.17} = 350000 \times \frac{0.5477}{0.17} \approx 350000 \times 3.222 = 1127700$$ 6. **Calculate NPV:** $$\text{NPV} = 1127700 - 174000 = 953700$$ 7. **Interpretation:** The NPV is positive ($953700$), indicating the project is financially viable and should be accepted.