A Landowner Is Looking to Develop a Coal Mine on Their

Multiple Choice

A landowner is looking to develop a coal mine on their property. She determines that a surface mine is the best option, as the coal seam she is targeting is close to the surface. The cost to start the mine is $20 million and the annual cost to operate is $16 million. She estimates that they can remove 450,000 tons of coal a year and sell the coal for $38.50 per ton. How long will it take before she is able to pay off her investment and start to make a profit?

A) 15 months
B) 15 years
C) 1.15 years
D) 115 months