44 45 444 444 PM Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota Dan Dority, the company's geologist, has just finished his analysis of the mine site. Ho has estimated that the mine would be productive for oight years, after which the gold would be completely minod. Dan has taken an estimate of the gold deposits to Alma Garrett, the company's financial officer Alma has been asked by Seth to perform an analysis of the new mine and present her recommendation on whether the company should open the new mine. Lenovo Year Cash Flow 0 -$625.000.000 70,000,000 2 129.000.000 183.000.000 3 235.000.000 5 210,000,000 6 164,000,000 7 108,000,000 235.000.000 210.000.000 164.000.000 108,000,000 86.000.000 - 90.000.000 17 8 Alma has used the estimates provided by Dan to determine the revenues that could be expected from the mine. She also has projected the expense of opening the mine and the annual operating expenses. It the company opens the mine, it will cost $625 million today, and it will have a cash outflow of 590 million in years from today in costs associated with closing the mine and reclaiming the area surrounding it. The expected cash flows each year from the mine are shown in the nearby table. Bullock Gold Mining has a 12 percent required return on all of its gold mines. QUESTIONS 1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and not present value of the proposed mine. 2. Based on your analysis, should the company open the mine? 3. Bonus question: Most spreadsheets do not have a built-in formula to calculate the payback period. Write a VBA script that calculates the payback period for a project