RT II Valuation and Capltal Budgeting 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 si He has estimated that the mine would be productive for eight years, after 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 ne mine and present her recommendation on whether the company should open the new mine Alma has used the estimates provided by Dan to determine the revenues that could he expected from the mine. She also has projected the expense of opening the mine and the annual operating expenses. If the company opens the mine, it will cost $950 million today and it will have a cash outflow of $75 million nine 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 following table. Bullock Mining has a 12 percent required return on all of its gold mines. Year Cash Flow 0 -$950,000,000 190,000,000 215,000,000 225,000,000 285,000,000 275,000,000 235,000,000 205,000,000 165,000,000 75,000,000 1 2 4 5 7 8 1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, profitability index, and net 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