Q/find total Net cashflow after Таx The following offshore oil development project is being proposed. What would be your approach to address the opportunity ?
Q/find total Net cashflow after Таx The following offshore oil development project is being proposed. What would be your approach to address the opportunity ?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Q/find total Net
cashflow after
Таax
The following offshore oil development project is being proposed. What would be
your approach to address the opportunity ?
Production Data
: First Oil beginning of Year 3
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
Annual Oil Production
5
15
15
10
2.5
1.0
0.5
Technical Costs
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
Platform
30
30
Facilities
15
30
Tangible Drilling
10
15
10
4
Intangible Drilling
20
32
15
5
Fixed Opex
14
15
15
15
15
15
Variable Opex
US$ 0.40/bbl produced
Oil Price forecast
: US$ 20/bbl, expected to remain constant thereafter
: Royalty 25%
Tax rate 20%, Tax losses not allowed
Capital Allowance - Straight line at 25% p.a.,
Only start after First Oil production
Terms and Conditions
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education