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A task force of eapital budgeting analysts at Morrison Limited collected the following data concerning the driling and production of known petroleum reserves at an

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A task force of eapital budgeting analysts at Morrison Limited collected the following data concerning the driling and production of known petroleum reserves at an offshore location: Table 6-4. Note: Use appropriate factor(s) from the table provided. Required: a. Calculate the net present value of the proposed investment in the drilling and production operation. Assume that the investment will be made at the beginning of 2022, and the net cash inflows from operations will be received in a lump sum at the end of each year (Bgnore income taxes). b. What will the internal rate of return on this investment be relative to the cost capital? c. Differences between estimates made by the task force and actual results would have an effect on the actual rate of return on the project. For each estimate, state the effect on the actual ROI if the estimate turns out to be less than the actual amount finally achieved. be made at the beginning of 2022, and the net cash inflows from operations will be recelved in a lump sum at the end of each year (ignore income taxes). b. What will the internal rate of return on this investment be relative to the cost of capital? c. Differences between estimates made by the task force and actual results would have an effect on the actual rate of return on the project. For each estimate, state the effect on the actual ROI if the estimate turns out to be less than the actual amount finally achieved. Answer is complete but not entirely correct. Compiete this question by enterligg your answers in the tabs below. Calculate the net present value of the proposed investment in the drilling and production operation. Assume that the investment will be made at the beginning of 2022, and the net cash inflows from operations will be recelved in a lump sum at the end of each year (Ignore income taxes)

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