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. He has

estimated that the mine will 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 new

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 be expected

from the mine. She has also projected the expense of opening the mine and the annual

operating expenses. If the company opens the mine, it will cost $$825$ million today, and it will

have 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 its gold mines.

a$.$ Construct a spreadsheet to calculate the net present value of the proposed mine.

Based on your NPV analysis, should the company open the mine? Justify your

recommendation.

b$.$ Construct a spreadsheet to calculate the modified internal rate of return $($MIRR$)$ of

the proposed mine. Based on your MIRR analysis, should the company open the

mine? Justify your recommendation.

c$.$ Construct a spreadsheet to calculate the Profitability Index $($PI$)$ of the proposed

mine. Based on your PI analysis, should the company open the mine? Justify your

recommendation.