BULLOCK GOLD MINING Seth Bullock, the owner of Bullock Gold Mining, is evaluating a now gold mine in Soath Dakota. Dan Dority, the compary's zeolokist. has just finished his anabsis of the mine sine. He has estimated that the mine would be prodactive for eight years, after which the gold would be completely mitsod. Dan has taken an estittate of the gold deposits to Alma Gariett. the company's financial officer. Alma has been asked by Seth to perform an analysis of the new mine and present her recoenmendation on whether the company should open the new mine: Ama has used the estimates provided by Dan to determine the revemues that could be expected from the nine. She has also projected the expense of opening the mine abd the annual operating expensec. If the coempany opens the mine, if will cost 5745 million today, and it will have a cash outflow of $55 million nine years from today in conts associated with closing the nine and rectaiming the area surrounding is. The expected cash flows each year from the mise are shown in the table. Alallock Mining has a reqaired return of 12 percent on all of its gold mines. QUESTIONS 1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present value of the proposed mine. 2. Based on your analysis, should the company open the mine