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3. (2.5 pts.) An exploration drilling firm is drilling at a unit cost of $2.5 per foot drilled, and $10.00 per foot for direct labor.
3. (2.5 pts.) An exploration drilling firm is drilling at a unit cost of $2.5 per foot drilled, and $10.00 per foot for direct labor. An investment of $200,000 in permanent core shack infrastructure is needed. The project totals 30,000 feet drilled. After one third of the total is drilled, a junior drilling firm offers to drill at $2.00 per foot drilled, and $8.00 per foot for direct labor. They will install a provisional core shack extension for $50,000 that and the end of the project will be dismantled. Other costs are allocated at 1.0 times the direct labor cost. Make a decision justified by numbers (show your calculations)
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