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Questions and Answers
What is Murphy's main concern regarding the decision to build a permanent road before doing the diamond drilling?
What is Murphy's main concern regarding the decision to build a permanent road before doing the diamond drilling?
- Delaying the extraction of gold by focusing on road construction first.
- Risking the success of the gold vein if the road construction fails.
- Incurring higher costs with no guarantee of success in finding gold.
- Not being able to start commercial operations immediately if the gold vein is accessible. (correct)
What does Murphy assume about extracting gold from the mine over a 10-year period?
What does Murphy assume about extracting gold from the mine over a 10-year period?
- The total amount of gold will be extracted at an even rate over 10 years. (correct)
- The cost of mining will decrease over time due to technological advancements.
- Mining will not be profitable if the discount rate increases.
- The total amount of gold will be extracted at an uneven rate over 10 years.
What discount rate did Murphy use when evaluating projects related to the gold mine?
What discount rate did Murphy use when evaluating projects related to the gold mine?
- 20% (correct)
- 15%
- 10%
- 25%
Why did Murphy consider using an ice road for exploratory drilling?
Why did Murphy consider using an ice road for exploratory drilling?
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What was the range of probability associated with the success of diamond drilling?
What was the range of probability associated with the success of diamond drilling?
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How did Murphy plan to proceed in extracting gold if the gold vein was economically accessible?
How did Murphy plan to proceed in extracting gold if the gold vein was economically accessible?
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