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THIS PROBLEM NEEDS TO BE SOLVE OVER EXCEL KINDLY SHARE RELATED FORMULAS AND WORKING THROUGH FORMULAS. Investment Analysis Measures Bullock Gold Mining Ross, S. A.,
THIS PROBLEM NEEDS TO BE SOLVE OVER EXCEL KINDLY SHARE RELATED FORMULAS AND WORKING THROUGH FORMULAS.
| Investment Analysis Measures | ||||||||||
Bullock Gold Mining | |||||||||||
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2020). Essentials of Corporate Finance (10th ed.), pg. 274. McGraw Hill LLC. | |||||||||||
Input area: | |||||||||||
Year | Cash flow | ||||||||||
0 | $ (625,000,000) | <--Listed negative because its an outflow of cash | |||||||||
1 | $ 70,000,000 | ||||||||||
2 | $ 129,000,000 | ||||||||||
3 | $ 183,000,000 | ||||||||||
4 | $ 235,000,000 | ||||||||||
5 | $ 210,000,000 | ||||||||||
6 | $ 164,000,000 | ||||||||||
7 | $ 108,000,000 | ||||||||||
8 | $ 86,000,000 | ||||||||||
9 | $ (90,000,000) | <---Listed as negative because investment lost revenue | |||||||||
Required return | 12% | ||||||||||
Payback Period Input area: | |||||||||||
Year | Cash Flow | Balance remaining | |||||||||
0 | $ (625,000,000) | ||||||||||
1 | $ 70,000,000 | ||||||||||
2 | $ 129,000,000 | ||||||||||
3 | $ 183,000,000 | ||||||||||
4 | $ 235,000,000 | ||||||||||
5 | $ 210,000,000 | ||||||||||
6 | $ 164,000,000 | ||||||||||
7 | $ 108,000,000 | ||||||||||
8 | $ 86,000,000 | ||||||||||
9 | $ (90,000,000) | ||||||||||
Output area: | |||||||||||
Payback period | <--Complete Payback Input Chart and enter answer here | ||||||||||
IRR | <--Use IRR fx for credit consideration. | ||||||||||
PV of future cash flows | <--Use NPV fx for credit consideration. | ||||||||||
Profitability index | PI = PV of future cash flows (CF1-infinite)/Initial Investment Cost | ||||||||||
Hint: Remember to only use Cash Flows 1-9 in NPV fx | |||||||||||
NPV of Project | NPV of project = PV of future cash flows (CF1-infinite) - Initial Investment Costs | ||||||||||
Based upon your calculations from the previous question, explain in detail (complete sentences) whether or not Bullock Gold Mining company should open the mine, and why. | |||||||||||
Reference: | |||||||||||
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2020). Essentials of Corporate Finance (10th ed.), pg. 274. McGraw Hill LLC. |
THIS PROBLEM NEEDS TO BE SOLVE OVER EXCEL KINDLY SHARE RELATED FORMULAS AND WORKING THROUGH FORMULAS.
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