3. (20 points) At the beginning of the year, Unocal Corporation announced that 2004 capital expenditures would total $1.93 billion. Planned investments included deep water exploration in the Gulf of Mexico and in the waters off Indonesia, oil and gas development in Thailand, oil development in the Caspian Sea, natural-gas development in China, and developments of the Mad Dog field in the United States and the K2 field in the Gulf of Mexico. We seek to evaluate Unocal's numerous projects. Because individual project data are not available here, assume that information on the various projects is as given in the table below. Assume further that Unocal's capital budget is capped at $1 billion and that the projects are independent. Investment alternatives for the energy company ption Investment E(PW(14%)) $345.00 $322.00 $999.00 $659.00 $335.00 $764.00 $947.00 $192.00 $935.00 $788.00 $655.44 $2371.17 $1984.61 $2195.41 $2004.82 $7634.59 $6237.34 $437.28 $2719.88 $320.72 S331.83 $970.44 $787.05 $1506.51 4 S1385.1 6 7 $4491.35 $2724.9 $281.84 $1644.79 $68.14 10 3. (20 points) At the beginning of the year, Unocal Corporation announced that 2004 capital expenditures would total $1.93 billion. Planned investments included deep water exploration in the Gulf of Mexico and in the waters off Indonesia, oil and gas development in Thailand, oil development in the Caspian Sea, natural-gas development in China, and developments of the Mad Dog field in the United States and the K2 field in the Gulf of Mexico. We seek to evaluate Unocal's numerous projects. Because individual project data are not available here, assume that information on the various projects is as given in the table below. Assume further that Unocal's capital budget is capped at $1 billion and that the projects are independent. Investment alternatives for the energy company ption Investment E(PW(14%)) $345.00 $322.00 $999.00 $659.00 $335.00 $764.00 $947.00 $192.00 $935.00 $788.00 $655.44 $2371.17 $1984.61 $2195.41 $2004.82 $7634.59 $6237.34 $437.28 $2719.88 $320.72 S331.83 $970.44 $787.05 $1506.51 4 S1385.1 6 7 $4491.35 $2724.9 $281.84 $1644.79 $68.14 10