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Can this be done with all the procedure. Very thankful!! Cost of Capital & Capital Budgeting Mini Case Instrucciones: Favor de ensear todo el procedimiento.

Can this be done with all the procedure. Very thankful!!
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Cost of Capital & Capital Budgeting Mini Case Instrucciones: Favor de ensear todo el procedimiento. No se aceptan respuestas sin procedimientos Bullock Gold Mining 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 sate. He has estimated that the mine would be productive for eight years, after which the gold would be completely mind. Dan bas taken an estimate of the gold deposits to Ama 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 Ver Cash 0 - 5625.000.000 70,000,000 1 2 129.000.000 183.000.000 235,000,000 5 210.000.000 6 164 000 000 7 10.000.000 36.000,000 90,000,000 The expected cashflows of the project are presented in the above table and below is the capital structure of the mine. The mine is in the 25% tax rate. Debr Dr. 40,000 6.5 percent coupon bonds outstanding, 20 years to maturity, selling for 105 of par, the bonds have a $1,000 par value each and make annual payments. 60.000 6.2 percent coupon bonds outstanding, 25 years to maturity, selling for 98 percent of par. the bonds have a $1.000 par value cach and make semiannual payments Common stock 1.350,000 shares outstanding, selling for $97 per share the beta is 1.15. Preferred and 90,000 shares of 5.7 percent preferred stock outstanding par value of $100. selling for 595 per share 7 percent expected market rik premium: 3 percent risk free rate Marka 1. Calculate the WACC for the mine. 2. Calculate the NPV, IRR, Profitability Index and payback period for the project. 3. Briefly explain for each of the four items in question 2, if the project should be accepted or rejected and why, based on the rule. Assume that the required return of the project is the cost of capital of the mine and that they require a payback period of 5 years

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