The price of oil is $45 per barrel. The effective lease rate and risk free rate are 3.0% and 4.0%, respectively. The constant cost of extraction is $25 per barrel and the volatility of prices is 15.0%
If an untapped well costs $240 to open and can produce indefinitely, what is the value of the unopened well?
A)
$424
B)
$554
C)
$635
D)
$785
Answer:
C
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Which of the following descriptions is most valid, as it applies to accurate methods of analyzing data?
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a. True b. False Indicate whether the statement is true or false