12) You are examining the financial viability of investing in some abandoned copper mines in Chile, which still have significant copper deposits in them. A geologist survey suggests that there might be 10 million pounds of copper in the mines still, and that the cost of opening up the mines will be $3 million (in present value dollars). The capacity output rate is 400,000 pounds a year, and the price of copper is expected to increase 4% a year. The Chilean government is willing to grant a 25-year lease on the mines. The average production cost is expected to be 40 cents a pound, and the current price per pound of copper is 85 cents. The production cost is expected to grow 3% a year, once initiated. The appropriate discount rate for this project is 8%. Would you accept this project? (6 pts)

Rate of return douglas keel, a financial analyst for orange industries, wishes to estimate the rate of return for two similar-risk investments, x and y. douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. a year earlier, investment x had a market value of $27 comma 000; and investment y had a market value of $46 comma 000. during the year, investment x generated cash flow of $2 comma 025 and investment y generated cash flow of $ 6 comma 770. the current market values of investments x and y are $28 comma 582 and $46 comma 000, respectively. a. calculate the expected rate of return on investments x and y using the most recent year's data. b. assuming that the two investments are equally risky, which one should douglas recommend? why?