Case Two: Bullock Gold Mining

Question 2: Based on your analysis, should the company open the mine?

Yes. The profitability index is 1.15, which is greater than >1

Bonus Question: Most spreadsheets do not have a formula to calculate the payback period. Write a VBA script that calculates the payback period for a project.

Sub Macro1()

Macro1 Macro

End Sub

Sub Functions_1()

Functions_1 Macro

End Sub

Function payback(series)

num = series.Count

For i = 1 To num

cumulative = cumulative + series(i)

If cumulative > 0 Then

part1 = Abs(cumulative - series(i))

part2 = cumulative

Exit For

End If

Next i

If (part1 + part2) <> 0 Then factor = part1 / (part1 + part2)

Period = i - 1

payback = Period + factor

End Function

when I put the actual numbers from the cashflow my excel doesn't work and is not correct

		Growth		10%
		0	1	2	3	4	5	6	7	8	9
Cash Flow		-200	-250	40.00	44.00	48.40	53.24	58.56	64.42	70.86	77.95
Accumulated Cash Flow		-200	-450	-210	84	92.4	101.64	111.804	122.9844	135.2828	148.8111
Match		3
Payback	9.90461
Step 1	Accumulate Cash Flow
Step 2	Find First Value >0
Step 3	Go Back 1 and Compute abs
Step 4	Compute abs of Current Value
Step 5	Compute Factor
Step 6	Add Factor to Integer