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A company has decided to drill a well. The probability of a dry hole is 0.32, with dry-hole cost of $220M. If the well is
A company has decided to drill a well. The probability of a dry hole is 0.32, with dry-hole cost of $220M. If the well is successful, completed well cost is $305M and NPV is estimated to be $760M. What is the expected profitability index of this well? Your answer must be correct to within +/-0.02
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