QUESTION 1 Seth Bullock, the owner of Bullock Gold Mining, is evahuating a new gold mine in South Dakota. Dan Dority, the company's geologist, has just finished his analysis of the mine sine. He has estimated that the mine would be productive for eight years, afer which the gold would be completely mined 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 Yeer Cash Flow $500,000,000 0,000,000 90,000,000 170,000,000 230,000,000 205,000,000 140,000,000 110,000,000 70,000,000 Alma has used the estimates provided by Dan to determine the revenues that could be expected froms the mine. She has also projected the expenses of opening the mine and the annual operating expenaes. If the company opens the mine, it will cost $500 million today, and it will bave a cash ourflow of 80million mine years from today in costs associated with closing the mine and roclaiming the from the mine are shown in the above table. Bellock Mining has a 12 pencent required returs on all of its gold mines t. The expected cash flows each year b. If we want to calculate the Net PresentVialue, what discount eate would we use for the cash fows c. What is the NP'V for this project? Show your work 4 Using the NPV method, should Bullock Gold Mining do this projeet? e. Whas are the advantages of the NPV method compared to the Payback method for evaluating capital budgoting projects? For 0ebwpms AL-F10 acrALT.ne..10