Suppose that an oil well is expected to produce 1,200,000 barrels of oil during its first year in production. However, its subsequent production (yield) is expected to decrease by 9% over the previous year's production. Suppose that the price of oil is expected to be $120 per barrel for the next five years. What would be the present worth of the anticipated revenue stream at an interest rate of 10% compounded annually over the next five years? OA $382.691,967 OB. $571,965,631 C. $642,772,835 OD. $464,229,576
Suppose that an oil well is expected to produce 1,200,000 barrels of oil during its first year in production. However, its subsequent production (yield) is expected to decrease by 9% over the previous year's production. Suppose that the price of oil is expected to be $120 per barrel for the next five years. What would be the present worth of the anticipated revenue stream at an interest rate of 10% compounded annually over the next five years? OA $382.691,967 OB. $571,965,631 C. $642,772,835 OD. $464,229,576
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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