You Are a Landowner Looking to Develop a Coal Mine

Multiple Choice

You are a landowner looking to develop a coal mine on your property.You determine that a surface mine is the best option,as the coal seam you are targeting is close to the surface.The cost to start the mine is $20 million and the annual cost to operate is $16 million.You estimate that you can remove 450,000 tons of coal a year and sell the coal for $38.50 per ton.How long will it take before you pay off your investment and start to make a profit?

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