2. The following data relates to an oil and gas lease. Costs and production are in thousands. Production is in barrels of oil equivalent (BOE). Year 0 1 2 3 4 5 Production (BOE) 175 100 75 55 35 Intangible Drilling $7,500 $2,500 Tangible Equipment $6,700 Lease Bonus $1,000 Selling price ($/BOE) $80 $80 $80 $80 $80 Operating costs $1,750 $1,000 $750 $500 $250 Royalties 12.5% 12.5% 12.5% 12.5% 12.5% a) Calculate the annual before-tax cash flows for years 0-5. b) Determine the projects ROR, NPV, and PVR for a minimum rate of return of 15%. c) Determine the break-even product selling price in years 1 through 5 that would provide the investor with a 15% ROR. 2. The following data relates to an oil and gas lease. Costs and production are in thousands. Production is in barrels of oil equivalent (BOE). Year 0 1 2 3 4 5 Production (BOE) 175 100 75 55 35 Intangible Drilling $7,500 $2,500 Tangible Equipment $6,700 Lease Bonus $1,000 Selling price ($/BOE) $80 $80 $80 $80 $80 Operating costs $1,750 $1,000 $750 $500 $250 Royalties 12.5% 12.5% 12.5% 12.5% 12.5% a) Calculate the annual before-tax cash flows for years 0-5. b) Determine the projects ROR, NPV, and PVR for a minimum rate of return of 15%. c) Determine the break-even product selling price in years 1 through 5 that would provide the investor with a 15% ROR