The Perth Mining Company owns the mining rights to several tracts of land on which metals have been found in the past. The amount of precious metals on some of the tracts is somewhat marginal, and the company is unsure whether it would be profitable to extract and sell the precious metals that these tracts contain. Tract
420 is one of these, and the following information about it has been gathered:
Investment in equipment needed
For extraction work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $400,000
Working capital investment needed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,000