CHAPTER 8
BULLOCK GOLD MINING
1. An example spreadsheet is:
Note, there is no Excel function to directly calculate the payback period. We used “If” statements in
our spreadsheet. The IF statement we used is:
2. Since the NPV of the mine is positive, the company should open the mine. We should note, it may be
advantageous to delay the mine opening because of real options, a topic covered in more detail in a
later chapter.
Function PAYBACK(invest, finflow)
Dim x As Double, v As Double
Dim c As Integer, i As Integer
x = Abs(invest)
i = 1
c = finflow.Count
Do
x = x – v
v = finflow.Cells(i).Value
If x = v Then