15.) Royalties received by an investor in an oil well vary according to the price of oil. Data collected from stripper wells in an established oil field were used to develop the probability-royalty relationship shown below. Royalties, $ per Year | 6200 8500 9600 10,300 12,600 15,500 Probability 0.10 0.21 0.32 0.24 0.09 0.04 (a) Calculate the expected value of royalty income (RI) per year. (b) Determine the probability that the royalty income will be at least $12,600 per year.

15.) Royalties received by an investor in an oil well vary according to the price of oil. Data collected from stripper wells in an established oil field were used to develop the probability-royalty relationship shown below. Royalties, $ per Year | 6200 8500 9600 10,300 12,600 15,500 Probability 0.10 0.21 0.32 0.24 0.09 0.04 (a) Calculate the expected value of royalty income (RI) per year. (b) Determine the probability that the royalty income will be at least $12,600 per year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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